After studying for many months, I decided that I would venture into my first lease option with my personal residence. While looking for my next home, I began to market the property on rentals.com and craigslist. I filmed a video tour of the property (see below) which turned out to be a great investment. I found a good deal on another home that needed about 5k of flooring and paint.
Once the necessary improvement were complete I moved into the home and signed an option to purchase agreement with a couple who were to put $3,500 for the option fee and pay $1,500 per month, $100 of which was a rent credit. I thought this deal was too good to be true. I was getting $212 monthly cashflow and made a quick $3,500. After cashing the option money, the couple put a stop payment on the check and discontinued communication with me. This was turning out to be exactly the situation I was afraid of. I lost 3 weeks of marketing to these people and had to pay another mortgage payment out of my reserves. I kept my head up and was determined to find a good tenant buyer.
I continued to market the property and finally found a tenant buyer for the property. She moved in this past weekend and seems to be good so far. She communicated much better which leaves me with some peace of mind. Not to mention that she has $170,000 in the bank from a recent settlement. She put $6,000 option money down and is paying $1,195 per month. I’m taking an $88 loss each month but that is coming out of her option fee. She plans to buy the property and probably could today but is waiting to see if it is the right place for her. Hopefully it works out.