Real Estate Options give investors more opportunities


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Real estate investors love using alternate forms of financing. By expanding your choices from buying and renting to other means, you open your real estate business up for more customer use. Some people hesitate at the thought of using alternate financing. All alternate financing does is provide a way to move the title of a property from one owner to the next without using banks. There are several types of alternate financing. Each one has its own rewards.

Lease option is of the most common alternate ways of financing a property. A person signs a lease to use or rent a property at a set rate. In addition, they purchase the right to buy the house at specified terms at a later date. Some buyers aren’t able to finance a property initially. This option gives buyers the opportunity to get their finances in order and hopefully be able to purchase the home later. A lease option gives buyers the option of purchase at a future date but never requires the person to actually buy it. Usually a percentage of the lease payments goes towards the purchase of the property.

A Lease purchase contract is a bit different. In a Lease purchase, the buyer still pays a lease or monthly fee to the owner for the right to live on the property. The buyer also pays for the right to purchase the property at a future date. Unlike a Lease Option, a Lease Purchase legally binds the buyer to the seller and the buyer is legally obligated to purchase the property before the date stated upon the paperwork. The good news is a portion of the monthly payment goes towards the future purchase of the property.

Rent to Own is another option. This is very similar to the lease to own option but it is used normally for lower priced homes of $150,000 or less. The buyer pays a down payment and monthly rent. He also pays for the right to purchase the property before the option to buy is up. Some real estate franchises have developed “special” rent to own programs.

Owner financing is the last option. In this option, the buyer pays a down payment that goes towards the equity on the home. The buyer pays mortgage payments to the seller, and he gets the title to the home before he moves in. The seller becomes the lending institution.

Opening your real estate investments up for alternate financing gives you chances to create cash flow and move properties at the same time. For more information on real estate investments, visit us at Homevestorsfranchise.com.

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