FAQ

1. Is lease to own the same as rent to own, lease purchase, rent to buy, and lease option?
2. What is the option consideration?
3. How much down payment or option consideration is required?
4. How do Sellers determine the monthly lease amounts?
5. How do Sellers determine the rent credit and option consideration amounts?
6. How do Sellers determine the final purchase price?
7. Is the purchase price negotiable?
8. Who is responsible for the Regular maintenance of the property?
9. What if the tenant does not wish to buy the home before the end of the lease option contract?
10. What type of potential Buyers choose the Lease to Own method?
11. Who pays the Insurance on the property?
12. I want to advertise my business on Lease-a-House.com, how do I do that?
13. How can I contact the Lease-a-House.com team? 
14. Who is Claude Diamond?
15. Who is Ray Belleville?
16. What will I learn from my Mentor?

 

1. Is lease to own the same as rent to own, lease purchase, rent to buy, and lease option?

Yes, the same strategy has been called many names over the last few decades. The principle is simple. The parties enter into two separate contracts. The first covers the lease agreement which covers the monthly lease payment and term. The second contract covers the option to purchase, and includes the final purchase price.

2. What is the option consideration?

The tenant pays an amount of money for the option to purchase the property at a fixed price. This is often referred to as a down payment. The amount is credited towards the final purchase price should the option be executed otherwise, it is non-refundable.

3. How much down payment or option consideration is required?

The typical “down payment”, more correctly lease option consideration, is 3-5% of the future purchase price.  This is paid before the tenant/buyer moves into the home and is non-refundable. The buyer is buying an option contract with the cost credited towards the purchase of the home as an incentive to exercise the option

4. How do Sellers determine the monthly lease amounts? 

Most sellers will ask for their exact MTI (Mortgage, Taxes, and Insurance) payment every month and others will simply choose the market rate for their Lease to Own. iLease-a-House.com recommends a $100/month premium for lease to own. This is virtually never an issue based on the amazing terms that are offered to the buyer. Where else can you live in a property before you buy it, all the while building equity in the form of a generous rent credit?

5. How do Sellers determine the rent credit and option consideration amounts?

There are many different strategies when it comes to rent credit and option consideration amount. iLease-a-House.com recommends anywhere from 25-100% rent credit and 2-5% option consideration when performing the sale as an investor. One must take into consideration the length of the lease and profit margin on the property to ensure that the sellers requirements are met.

Some sellers have been known to offer as much as 100% rent credit in the first year, and none in subsequent years. This offers a huge incentive to the potential buyer and will often allow a larger option consideration amount based on the extremely favorable terms. We rarely see option consideration amounts larger than 8% even with 100% rent credit.

The other spectrum is also available. We see 25% rent credit in a 3 year term with as little as 2 months lease payment as the option consideration. This is a typical strategy of the typical landlord, looking to get out of the toilets and leaky faucet hassles on their "homes for rent" properties. This will make the deal very easy for the current occupants. This works extremely well in condo conversion projects.

There are many more options to consider when valuing the lease purchase. You can find more discussion in our advanced training products.

6. How do Sellers determine the final purchase price?

Some Sellers realize all of the potential for Buyers to benefit from a fixed purchase price (in growing real estate markets) and will take that into account when creating the figure. It is typical to allow for a yearly appreciation of property based on a 2.5-5% increase per year from the current market asking price.

There are third party property evaluation products on the market, costing in the $30-40 range (if you don't want the spam email from an agent). We recommend using one of these services to evaluate your current market value. In 2009, it is very common for there not to be any appreciation in the option to purchase price. The housing market is still relatively soft, so convincing a prospective buyer that the property will gain 10% in the next 3 years may make the house less marketable.

7. Is the purchase price negotiable?

Due to the favorable terms provided to the buyer, a seller typically does not need to negotiate the purchase price. In declining markets, there is purchase price protection built in for the buyer. Should there be a drastic reduction in the market value of the property over the term of the lease, the buyer may wish to renegotiate the purchase price in order to secure financing. There are options covered in our advanced training products to create a win win situation should this occur.

8. Who is responsible for the Regular maintenance of the property?

Just like leasing a car, the tenant is responsible for basic maintenance on the property. This typically means that items under $1000 are performed by the tenant in exchange for a generous rent credit applied to the purchase price of the house.

9. What if the tenant does not wish to buy the home before the end of the lease option contract?

If the tenant does not wish to execute the option to purchase, the house is returned to the owner in good repair. All rent credit and option consideration monies are non-refundable and non-transferable.

10. What type of potential Buyers choose the Lease to Own method? 
 
Potential Buyers have historically included the following:

• People that are unsure about where they want to live but want to build equity
• New Grads looking for their first home.
• The retired looking to supplement their income for a few more years before dipping into their savings.
• People that are going through divorce or may be relocating
• People with impaired credit
• People who are tired of renting and want to take positive steps towards home ownership
• Real estate investors

11. Who pays the Insurance on the property?

There are 2 types of insurance, each having their own place. The owner of the property will most often carry property insurance to cover the building in the event of fire, etc. The tenant will carry occupant insurance to protect their belongings due to theft, fire, etc.

12. I want to advertise my business on Lease-a-House.com, how do I do that?

Please use the Contact Us at the top of the page. We are interested in affiliate programs and any specialists who offer added value to our subscriber base.

13. How can I contact the Lease-a-House.com team? 

Just visit our Contact Us page.  We pride ourselves on being highly responsive to all queries.

14. Who is Claude Diamond?  

Claude Diamond is a seasoned lease to own investor and the personal mentor of the creator of this site. He has over 26 years experience in sales, real estate techniques, and mentoring. He speaks regularly at real estate investment networks all over the US, and mentors in Europe, Australia, Canada, and Mexico. He is also a lawyer. There is no better mentor on the planet, and you have him when you purchase our advanced training products.

15. Who is Ray Belleville?  

Ray Belleville is the creator of this web site. He is an entrepreneur currently living in Ottawa, Canada. He's traveled the world, spending time in Paris, London, Sydney, and Rio. Ray has coached competitive sports for over 10 years, taught martial arts for half as many, and one of his roles is as an instructor, courseware developer and subject matter expert. Lease to own training has been a passion of his, which prompted him to create the iLease-a-House.com web site in order to continue to share knowledge and opportunity in real estate.

16. What will I learn from my Mentor?  

If you've purchased one of the advanced lease to own training products you will receive a 1 hour mentoring session with Claude Diamond. It is recommended that you review the material that is given in as much detail as possible before performing your mentoring session. The session is valid within 90 days of ordering, so don't wait to long. In this session, Claude will review your lease to own strategy and answer any questions you may have based on your studies.

If you've chosen a consultation or joint venture package, you will have plenty of time to spend with either Claude or Ray as your personal mentor. We will work with you to do one or more of the following

• Build an online and paper marketing plan for your lease purchase property or properties
• Discuss the terms of the lease purchase contract that best suit your needs include purchase price, lease amount, option consideration, and duration.
• Maximize your return on investment using the rent to own strategy
• Create a web site that attracts buyers and sellers to your investment business
• Leverage the sandwich lease to start controlling real estate and making positive cash flow