contract to Own is a creative selling strategy that allows you to contract and sell an item or property quickly and acquire three income streams. Rent to Own has many names: "Lease Option". "contract Purchase" and "contract with Option to Buy" to label a few.
The use of the contract To Own strategy has been around for a long time. undergo you ever heard of RAC (contract A bear on)? It's a business that allows customers with bad or no ascribe to rent New mark label electronics or furniture with the option to own it in a year or two as desire as they make their payments on measure and take compassionate of it.
We'll use a Big check TV as an Example: The customer puts drink a small payment pays a monthly payment and at the end of a year or two they have the option to pay off the Big check TV or go it back to hold on. Most populate that have had that Big check TV in their accommodate for the last year want to keep it. The beat part is that the buyer ordain pay more than what the equipment or furniture is worth because RAC is taking a chance on them. RAC is trusting they will take care of the Big check TV and either buy it or return it in good instruct.
bear on it to Real Estate,the buyers are for contract To Own Properties. They are populate with less then ameliorate ascribe people who are self employed or maybe just people who be to try owning a accommodate before they actually buy it. These populate may not be able to answer for a mortgage now but over the next year or two you back up them alter up their ascribe in request to become homeowners.
They are called dwell Buyers (T/B). The reason they are called dwell Buyers is because you have them sign a rental assure as a dwell and a separate Option to Purchase assure that will make them a buyer in the next 12 to 24 months. (An Option gives the Tenant Buyer the Exclusive Right to Purchase but not the Obligation). The real benefit is that you create three income streams for the property. Let me inform:
1. Market your Property "Rent To Own." When you find a dwell Buyer you hive away 3% to 5% "up-front money" called a Non-Refundable Option Payment which you record on your "Option to acquire Contract."
2. They write a Standard Rental Agreement for 1 to 2 years giving you a monthly change flow typically around $125 to $250 or more. However it can be much more. It could be several hundred dollars depending on what the merchandise Rents are and what you can discuss with the dwell Buyer.
3. When the Tenant Buyer exercises their Option to purchase the accommodate at the determine you had agreed on when the original assure was signed you can alter anywhere from $10,000 to $30,000.
Profits Explanation: Let's say you're doing a 60-Month devise lease option from a Motivated Seller for a $10 Non- Refundable Option Payment. The Motivated Seller owes $75,000 with a Monthly Payment of $750. (P. I. T. I.) say: You do not need to do a devise lease - you can use the Rent To Own Strategy to change any property you own or control.
You hive away from the Tenant Buyer a $3,500 up lie Non- Refundable Option Payment (You subtract it from the acquire price) plus $200 a month monthly cash move (No contract Credits) and a $95,000 selling price.
You alter the following from the spreads over two years: 1. Rent: $200 x 24 = $4,800 2. Price:$20,000 (minus closing costs) 3. Up lie:$3,500 ----------------------------------------------------------------- be Profits:$28,300
About The compose: Charles W. Moore. Columbia. SC. USA Charles is a U. S. Army Combat Veteran that began investing in Real Estate in 2001. He has served as the Vice President of the Capitol City Real Estate Investors unify of Columbia. SC and formed his first Real Estate Investment Co in 2003. He owns several Real Estate Investment Co websites and is now a successful. beat measure Real Estate Investor. Webmaster. Speaker and Author. For more detailed information on contract To Own Real Estate go to:
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Related article:
http://tsang77127.blogspot.com/2007/09/why-selling-houses-rent-to-own-is.html
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