Archive for lease/purchase

We see them all over the roads today.  Growing in popularity, Hybrid vehicles are beginning to offer an enticing option to dependence on foreign oil supplies.  Similarly, the Buy Low, Rent Smart, Sell High lease/purchase model offers investors a Hybrid of the “buy and flip” and “buy and hold” investment models.

Most residential investment models resemble and can be grouped into one of two general categories.  Each has a major flaw that concerns many investors who consider or invest in each model.

The “buy and flip” model by definition is for the investor who seeks to purchase property at a discount, oftentimes improve the property, then sell the property quickly for immediate gain.  This model is ideal for investors who have no interest in landlording, as the “buy and flip” investor does not intend to seek a tenant for the property in advance of sale.

The main problem with the “buy and flip” model is that if a buyer does not come by quickly, then the investor is faced with discounting the property and/or involving a real estate agent in the marketing of the property.  Due to this possibility, most “buy and flip” investors need a discount of 25% or more even after adjusting for the necessary repairs and improvement.  With such high investor discounts, the pool of properties available with such significant discounts is often small.  Simply put, the higher the discount the investor needs to make his or her model work, generally the fewer properties available at such a steep discount. Read More→

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