Hi, it's Lou Brown. I'm back with another of my 101 cash
flow accelerators where you can separate yourself from being just a landlord
into a housing provider, an affordable housing provider. In fact, a certified
affordable housing provider.
flow accelerators where you can separate yourself from being just a landlord
into a housing provider, an affordable housing provider. In fact, a certified
affordable housing provider.
One of the things that I teach you to do in this
particular segment is to separate your documentation. So in other words, we're
entering into two different agreements. If we're going to do a lease with the
option to buy, we've got a lease, you've got what we call our standard rental
agreement, and that covers the relationship that we have with them as an
occupant of the property. Separately, they're going to purchase another thing
called an option to buy and and that option to purchase is going to give them
the right to purchase that property within a designated period of time with a
certain requirements within that, and as a result of them agreeing to that
separate agreement, they now have that option to purchase the property.
particular segment is to separate your documentation. So in other words, we're
entering into two different agreements. If we're going to do a lease with the
option to buy, we've got a lease, you've got what we call our standard rental
agreement, and that covers the relationship that we have with them as an
occupant of the property. Separately, they're going to purchase another thing
called an option to buy and and that option to purchase is going to give them
the right to purchase that property within a designated period of time with a
certain requirements within that, and as a result of them agreeing to that
separate agreement, they now have that option to purchase the property.
Well, what my advice for you is to stay out of trouble
with the court. If you combine your rental agreement with your option agreement
in the same document, it can create problems for you. The judge can look at
that option fee that you collected, which is typically non refundable. And
that's what we want to collect, right? Non refundable option consideration
means that we can actually spend the money now we don't have to escrow it, we
don't have to wait until later. And if you choose to give some or all of that
amount as a credit towards their purchase of the home, that's fine. That's
going to be designated in the paperwork. But you can go ahead and spend the
money right now. And there's so many benefits to doing that. Of course, that's
a major cashflow accelerator. And the important thing is documentation that
your standard rental agreement is separate from your option agreement because
there are two different agreements that are happening simultaneously.
with the court. If you combine your rental agreement with your option agreement
in the same document, it can create problems for you. The judge can look at
that option fee that you collected, which is typically non refundable. And
that's what we want to collect, right? Non refundable option consideration
means that we can actually spend the money now we don't have to escrow it, we
don't have to wait until later. And if you choose to give some or all of that
amount as a credit towards their purchase of the home, that's fine. That's
going to be designated in the paperwork. But you can go ahead and spend the
money right now. And there's so many benefits to doing that. Of course, that's
a major cashflow accelerator. And the important thing is documentation that
your standard rental agreement is separate from your option agreement because
there are two different agreements that are happening simultaneously.
And so you want to get the benefit of both of those and
not have the judge look at your option consideration as security deposit. So
over in the standard rental agreement, we've got that segmented out. And in
fact, we teach you that there's actually another way you can handle your down
payment in relation to the option agreement. So those are two different
documents, two different agreements that you're making with the resident that
will keep you out of trouble. Baby, that's a brilliant thing.
not have the judge look at your option consideration as security deposit. So
over in the standard rental agreement, we've got that segmented out. And in
fact, we teach you that there's actually another way you can handle your down
payment in relation to the option agreement. So those are two different
documents, two different agreements that you're making with the resident that
will keep you out of trouble. Baby, that's a brilliant thing.
So hopefully this has been of benefit to you. Like it.
Love it. Share it. And do subscribe. Thanks so much for joining me. If you want
to learn more about options, you can definitely do that at my lease options
course. StreetSmartInvestor.com go to tools and then go to volume 9 lease
options. Well worth the investment. Get the six CDs, get the forms disk with all
of the forms for both buying and selling, using the lease with the option to
buy technique. It's a wonderful way that we've used for now over 40 years of
being in this business of buying, holding and selling property, giving others
the opportunity and the path to home ownership. You too can make a difference
in your community and in other people's lives. I hope this has been a value to
you. Like it. Love it, share it, and do subscribe. Thank you so much for
joining me. My name's Lou Brown. Yeah, baby!
Love it. Share it. And do subscribe. Thanks so much for joining me. If you want
to learn more about options, you can definitely do that at my lease options
course. StreetSmartInvestor.com go to tools and then go to volume 9 lease
options. Well worth the investment. Get the six CDs, get the forms disk with all
of the forms for both buying and selling, using the lease with the option to
buy technique. It's a wonderful way that we've used for now over 40 years of
being in this business of buying, holding and selling property, giving others
the opportunity and the path to home ownership. You too can make a difference
in your community and in other people's lives. I hope this has been a value to
you. Like it. Love it, share it, and do subscribe. Thank you so much for
joining me. My name's Lou Brown. Yeah, baby!
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