Homes $500K-$800K range, Low rents..Do L/O work?

[R/E Possibilities 0]

 

I live in Marin County in the San Francisco Bay Area. The Median price is around $650K. My 2 bed, 1bath (874 sq. Ft) shack is about $425,000 and would rent for only $1,800 to $2,000.

 

Do lease options work with high price properties? The rents are no where near what the payments/taxes would be.

 

Would a different strategy be needed in the SF Bay Area?

 

Thanks,

 

Ed

 

P.s. all of the deals I see posted on the success stories are in the 100,000-200,000 range. Does anyone know of $500,000 -$800,000 success stories?)

[MichaelC 160]

Ed, yes, lease options do work in your area, outrageous prices and all. You'll need to employ a different strategy, however.

For example, with the numbers you quoted, there is clearly no reason why you should consider a sandwich lease. It simply won't work.

But, what about taking control of this same property with those same numbers and instead of being in the middle, assigning that contract you have negotiated to a third party. Say, the end user who wants a property where this one is located. Do you think a three year lease with option would be attractive to this person? It's in the area he and his significant other are looking; they like the particular dwelling; but today they can't qualify.

You do a deal with a seller, and lock up this deal for three years at the seller's asking price. He's happy because he got full price, and paid no Realtor's commission or closing costs in the process.

Your tenant/buyer is thrilled because he just bought three years worth of time, and appreciation, and can move in to his dream house today.

You are a happy camper because you just collected a $__________ (fill in the blank) check for your assignment fee.

So, yes, lease purchasing works in all areas and all price ranges. You just need to be sharp enough to employ different different strategies as the situation dictates. And you need to work hard enough to find the deals. That's 80% of the battle in my experience. Find the motivated seller and come back here. We'll show you the path to righteousness and glory, fame and fortune .