Real Estate Investing Secrets:
How to Sell to 100% of the Market Using Lease Options
When investing in property, you will find that if you make houses easy for people to buy, your properties will be easier to sell. Most people selling houses today are selling to the 80% of the population who have good enough credit to qualify for a bank loan. These buyers have a choice. They have been approved for a loan and can look at 20 or 30 properties and negotiate hard with the sellers. It is important to keep in mind when investing in property that this is not necessarily your market when selling with a lease option.
When I invest in property, I have found that when your exit strategy is to lease the option to a new buyer, you are targeting people who may not immediately qualify for a bank loan. This represents about 20% of the population. Perhaps they are investors who cannot obtain more bank loans or are new to the country and have not established a credit file that satisfies the banks. Sometimes they have a lot of cash but didn’t pay their credit card or phone bills on time and can’t qualify for a loan because of these credit problems. Also a divorce will damage credit files. It’s usually not major things, it’s just credit issues that prevent people from getting a bank loan today, but they can probably qualify in a year or two.
And what you’re going to find is that when you’re investing in property, by offering a lease option to new buyers, you’re going to attract 100% of the market that’s looking to buy a property, not just 80%. Later, after the buyers have made their payments to you, they will probably want to refinance and pay you back in a couple of years.
A fundamental rule of property investing is that when you lease the option you are attracting a lot more people because you don’t have the same guidelines as a bank. You make it so much easier for people to come in and buy a property. And the benefit to you is that you have made your property easier to sell.
