3. Plan Blog

One Deal Helps a Lot of People

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A Not So Easy Lease Option Transaction

Whenever I do a Lease Option deal there are many people involved. I have systematized the process and I delegate a lot of the activities to other people who benefit from the transaction. Here is a typical Lease Option transaction and the people involved and how they make their money.

  1. I get a referral from one of my referrers about a potential buyer. (commission or referral fee)
  2. Buyer’s realtor meets with the buyer and qualifies them for our program. (eventual purchase)
  3. Our mortgage broker meets with the buyers to qualify them for our program. (mortgage fees on eventual purchase)
  4. Buyers meet with lawyers to ensure they understand the deal. (legal fees)
  5. Buyer finds a home and has a property inspector do an inspection. (Inspection fees)
  6. Deal is presented to Investor and investor puts in an offer. (eventual return on investment)
  7. Mortgage broker finds mortgage for investor. (mortgage fees for investor)
  8. Property appraiser does a property appraisal. (appraisal fee)
  9. Bank lends money to investor. (mortgage interest)
  10. CMHC insures mortgage. (Loan Insurance fee)
  11. Insurance broker gets insurance for the property. (commission fees)
  12. Insurance company insures property. (insurance premium)
  13. Investor’s Lawyer performs transaction of Purchase and Sale Agreement. (legal fees)
  14. Seller’s Realtor gets paid. (sales commissions)
  15. Seller’s Lawyer gets paid. (legal fees)
  16. Investor pays Setup fees to my company (setup fees)
  17. Investor Lease Options property to my company. (share of Return on Investment)

The nice thing about this whole transaction is that I only meet with my investor a couple of times and with my realtor a couple of time.

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