Whenever I talk about this, I have to remember to slow down, as I get so excited by the concept that I often leave people shell shocked or bewildered.
The basic concept is taking over a vendor's mortgage, then renting the property out to cover the mortgage payments whilst agreeing a price which would be advantageous when the banks start lending again. Some people call it lease options, some lease to own, rent to buy or even rent now and buy later.
If you want, you can stop at this point and take the property into your portfolio for a long term hold, by buying the house yourself during the term of the option.
I met someone this week who bought a house this way, then sold it onto someone who couldn't get a mortgage, but wanted to buy and takes a cut based on the difference between the prices he buys it in at and the pice he's selling on at. Pure genius.
When I first heard of the concept, I couldn't work out why a vendor would go for it, until the tightening in the mortgage market and then it started to make perfect sense
Having just read your inspirational book, this sounds a most exciting concept Peter.I can't wait to hear more about this at the next "Money Gym" Open Day on 21st March at which I believe you will be one of the speakers.
Best Wishes,
Heather Self
Posted by: Heather Self | February 08, 2009 at 10:58