Lease options when you buy or control are one of the easiest and fastest ways to make money in real estate investing.
Generally as a real estate investor you’re trying to solve a problem.
As an example let’s say that you talk to a seller that needs to move and they don’t have a lot of equity. To have real urgency to move, either a job or family.
So you do what’s called a lease option assignment where you offer to get a tenant buyer in the property/.
You enter into a assignable contract. You make 3 to 5% of the value of the property as lease option assignment investor.
Now another way to make money when you buy or control is with a sandwich lease option.
This means you stay in the middle meaning that you going to sublease and sub-option from the seller. And then sublease and sub option to the tenant buyer.
You make money three ways
1 you make money in the difference between option consideration what you give the seller and option consideration what you receive from the tenant buyer
2 you make money in the difference between the rent you pay the seller which is generally 90% of Market Rent, and 105% of Market rent you charge the tenant buyer.
3 lastly you make money on the difference between the strike price that you pay the seller on the lease with option, and the strike price you charge the tenant buyer on the lease with option
Many times these differences are huge.
