Lease Purchase Overview

Kaz Management has been doing lease purchases for years and has completed many of them. We have made plenty of mistakes and have learned how to structure them properly so they get closed. We have done them for private investors, banks, lenders, REIT's, builders and other brokers. We teach seminars on Lease Purchase and get rave reviews. A Lease Purchase is a contract to sell with a delayed closing date. It is not a "lease option" as it commits a buyer to buying the property rather than giving them an option to buy. A Lease Purchase is designed to get it closed and should only be used by someone who really intends to sell the property. When selling it isn't working, a Lease Purchase is the next best thing. Every time we faced a roadblock, got into a tug-of-war with a tenant or faced a judge over our Lease Purchase document we made the changes needed to tweak it and make it that much better. With many of them under our belt we feel we have it down pat and you do not have to pay for someone's learning curves.The real estate business is full of paperwork and Lease Purchasing a property is no exception. We have the process down to a science and make is easy for you to get started.

Here's an example transaction:

You find a nice 3 bedroom, 1 bath single family home located in a near west suburb of Chicago in a great neighborhood with good schools and a strong community. It has been freshly painted, cleaned, and is ready to move in. The purchase price will be $215,000. Monthly rent payments will be $1,500 and you will receive a 50% rent credit ($750 per month). You need between 2.5% and 7% in up front Option Consideration. Let's say your budget allows for $6,000 for Option Consideration. This equates to approximately 2.8% ($6,000/215,000). You will also need $1,500 for the first months rent for a total initial payment of $7,500.

Please note: Option consideration is not a security deposit. It is a non refundable payment toward the purchase price and is 100% credited toward reducing the price of the home.

Now suppose you paid all your monthly rent payments on or before the due date and you choose to buy the rent to own home at the end of the 12 month lease purchase contract. You will have $15,000 in equity before you even own the home! Here's the math:

You started with $6,000 and by paying your rent on time, your equity position grew 150% (another $9,000) for a total of $15,000 with 12 months. Not a bad deal!

Let's get started