Our First Property Purchase Lease Option Plan
Our first Lease Option deal
I recall sourcing and closing on my very first Lease Option deal.
I’d learned a number of strategies to be able to source these deals but had received a fair amount of rejection from estate agents and letting agents.
But it wasn’t until I realised what the positives were for the estate agents, and that I needs to look for people, not property that I was successful.
My first deal was a two bed semi detached property in Merseyside. The owner’s (landlord) story was that he had bought five properties right at the peak of the housing market. Do you remember when people said you can’t lose money in bricks and mortar…..?
…..well plenty did I can tell you and lost money in property.
He is a small builder living in Wales and his properties were scattered all over the north of England in random areas.
So what happened was that the credit crunch hit us followed by the worst recession in living memory. His building business suffered so his cash in suffered. At the same time his properties needed maintenance and upkeep which he struggled to fund and so he lost his decent tenants.
What lead to the Purchase Lease Plan being needed
So in moved the bad ones. After a couple of years of damage, theft, evictions, arrears and court, he then realised that all of his properties had been hit by a falling housing market which put his property into negative equity.
What was he to do? He was desperately trying to work to avoid his property mortgages going to arrears, he was super stressed through all the problems he was encountering with tenants, but he couldn’t sell otherwise he was going into bankruptcy.
So I found him with this thing called Purchase Lease Options he almost threw his properties at us.
How the Purchase Lease Option Plan worked.
I went over to meet him at the first property and shook hands on the Lease Option deal there and then. The main terms of the Lease Option contract went back to back with the mortgage whereby we babysat the mortgage which relieved him from the pressures of finding that money every month.
We then took all five properties in his portfolio.
I had found my first motivated seller. Up until that point I thought motivated sellers were made up things….
…..my word you know you have found one when you really do find one.
The way we dealt was to to bring all five properties into our portfolio but then we did what we call ‘Assign the Deed’. We flipped the Lease Option deal to other investors for anything between £3.5k – £5k depending how good the Lease Option terms were.
That was the start of our creative property sourcing story and it changed the whole way we carried out our business.
Get in Touch
If you would like to find out more about Purchase Lease Option Plans or what your financial options are, we might be able to point you in the right direction. Feel free to get in touch using the details at the bottom of this page.