00:30 – Where’s the money?
00:50 – The 3 stages of profit
01:15 – The power of joint ventures
Hi, everybody, it’s Rick Otton here from rickotton.co.uk. I was with my Go Directors, the group of people that I mentor every year. We buy lots of properties, and what we were talking about was the money on a lease option, and whereabouts are all the different components where you can make money from a lease option transaction. Let’s look at that today in today’s video.
Okay, lease options, where is the money in a lease option? Well, normally, when you sell a property on a lease option, there’s usually some up front money you are given by the client who’s coming in to buy the property from you. Never sell a property to anybody on a lease option unless they renovate it, fix it up, rehab it, or give you some cash up front.
Never sell any house to anybody on a lease option who doesn’t give you some up front get-started money.
That’s the first pocket money you get for the lease option.
Second thing is the cash flow, more coming in from them than what you’re paying going out.
And thirdly, usually, the strike price, the price at which they buy the property from you is going to be more than what you paid for the property so you get money at the back end. But, there are extra ways, as well.
Quite often, I’ll bring in a property investor and he will fund the lease option in return for a share of the profit. I’m happy to share the profit with him in return for having no money invested in the property structure and no money invested in the lease option.
There’s nothing more powerful than making profits out of property, where you have nothing invested. How many of those can we do to build a really big lease option portfolio?
My name is Rick Otton from rickotton.co.uk. I hope you found this was interesting, and if you did, share the video and click here to learn more.