Warning - 4 Investor Secrets You Must Know Before Entering A Lease Option


Visitors: 162

Warning! …Before Entering Into a Lease Option, You Must Know These 4 Secret Ways That Many Investors Will TRY to Take Advantage of You. Do you realize that the national average for SUCCESSFUL Lease Option Purchases is 15%-22%.

Unfortunately, these numbers are so low because all too often, investors will intentionally stack the odds in their favor.

What if… I could show you how to quadruple your chance of success by revealing a few tricks that investors have been using for years, when they sell a home “lease option” or “rent-to-own”. Here and now, I am going to REVEAL 4 “investor secrets” that investors hope you don’t catch on to, because they are designed protect the investor and make the deal “heavily stacked in his favor”. By discovering these easily noticeable signs, You Will Be Able To…

  • find your dream home and dream investor immediately

  • never waste your time dealing with an investor trying to take advantage of you

  • and always be assured that you have “stacked the odds of success” in your favor.

    First of all, if you are looking to buy a home, then congratulations! You really are doing yourself a huge favor by getting into a lease option, and getting out the rent trap that has so many people stuck. But, ONLY IF YOU DO IT RIGHT. Read carefully so that you can stand the highest chance for a successful experience with out getting taken by an investor.


    I am not suggesting that an investor who wants “some” security from his tenant/buyer is out of line. However, be cautious when agreeing to pay these. It seems so natural to feel like you have to pay this, because investors will usually insist on a fairly large down. At least any more than a customary security deposit.

    They will justify this need with the excuse that you are a credit risk and therefore they need the security that you are serious.

    It seems logical doesn't it? But what they really know is that based on the national averages, they stand a pretty good chance of getting this home back. And when they do, …they hope to have kept your big fat down payment for themselves.

    It is a huge safety net they put underneath themselves for the day that you give them the home back. Remember, they know that if you are an average “Joe Buyer”, they stand an 80% chance of getting that home back in the next handful of months.

    It is true that if you succeed in purchasing the home, it becomes irrelevant. But remember my point, the investor is already assuming you will fail, and therefore wants to keep your money regardless. Therefore, they want a fairly big one.

    Secret Two: RENT CREDITS

    This is the greatest brain wash that has ever existed.


    Answer – ALWAYS, the investor.

    Investors will often lure you into their home by promising rent credits. Or in other words, out of every monthly payment, they agree to take a portion of that payment and give it back to you when you buy the home. For example, if you paid $1200 in rent each month, …the investor might agree to give you back $200 per month. They will often credit it back to you for your future down payment or closing cost.

    On the surface that sounds good to you, because you think he is being generous to offer you that big savings.

    But here are the facts. Mr. Investor is anticipating that you will be one of the 80% that give them the home back. And if you voluntarily GAVE HIM $200 MORE than you should have – Guess who just got richer at your expense. (4 out of 5 times)

    Again, you might argue that if you succeed it is irrelevant, and that you were glad to have had the little nest egg saved up or credited back. But like I said before, I will reiterate that the investor is fully expecting the law of averages. He completely anticipates that you will not actually buy his home. Therefore he keeps the $1000 he normally would want, and also the $200 per month that you gave him over and above so that he could do this rent credit thingy.

    My advise is this… negotiate to pay him $1000 (which is going to be his net anyway when you succeed), and then SAVE your own $200 in your own banking account and keep it out of Mr. Investors hands altogether.

    Same net result to you… Much more security!


    When an investor only offers 6 or 12 month terms, they are setting the stage for you to fail. 9 times out of 10 you will need 12-18 months to have your credit ready for a home loan. Rare is the exception to this rule DESPITE how many promises lenders have made to you about how close you are to getting your own loan.

    BE REALISTIC and don’t let an investor fool you into taking anything less than a 24 month lease option term. If an investor has your best interest at heart they are going to give you plenty of time to clear up your issues and help you succeed. But unfortunately many investors don’t. THIS IS CRITICAL! You Must have a length of term that is long and realistic. Anything less is suicide.


    The average investor will not offer to help you build your credit up while you are in the home. This is a certain sign that your investor clearly wants you to turn the home back to him in the future. Be careful to stay away from investors who assure you that “you can handle that part of it on your own”.

    This is one area that 9 out of 10 buyers NEED credible help to overcome their challenges. If an investor offers you credit help, then that is a good sign that they want you to succeed. But if they don’t…this is their way of hedging the odds in their favor, that they can take the home back in the future, because you will fail.


    A Lease Option is a VERY POWERFUL way to take control of your future. If you can’t otherwise get a home loan I highly recommend it over a standard rental home or an apartment. Just make sure you do it right. Watch out for these tale-tale signs of a predator investor. There are companies and private investors out there who offer legitimately great deals to tenant/buyers who need a fair and honest opportunity. Some with success rates as high as 90% of the time. (Verses the national average 15%)

    Search them out and compare some of their offers to each other. Never settle for a home where the investor is “stacking” the odds in his favor by using any of these above listed tactics. Now that you know these 4 simple secrets…

    …You are more empowered to find the right home, at the right price, in the right neighborhood, and with the RIGHT INVESTOR!

    Dan Ostler is the owner of LeaseOptionHomeBuying.com . Dan is an author, speaker, business owner, investor, and one of the nations leading Lease Option Consultants. He has been offering housing solutions and consulting advice to families with credit issues in all parts of the country for the past 8 years, and welcomes all visitors to his website for tons of **FREE** Information.

  • (1336)

    Article Source:

    Rate this Article: 
    Real Estate Lease Option Danger
    Rated 4 / 5
    based on 5 votes

    Related Articles:

    The Real Estate Investor's Guide to Finding Quality Tenants for Lease-to-Own ..

    by: J. Voss (March 18, 2008) 
    (Real Estate/Leasing Renting)

    Lease Option

    by: Phill Grove (February 20, 2011) 

    The Lease And Purchase Option

    by: Quoc Nguyen (August 11, 2005) 
    (Finance/Leases Leasing)

    Its a Rent To Own Not a Lease Option

    by: James Orr (June 19, 2008) 
    (Real Estate/Leasing Renting)

    How To Sell On Lease Option

    by: Steven Gillman (January 26, 2007) 
    (Real Estate)

    The Car Lease Option Is it For You?

    by: Mike Kay (June 24, 2008) 

    Lease-Option - The Other Way to Sell

    by: Joseph Zanetti (February 01, 2008) 
    (Real Estate/Selling)

    Lease - Option vs Contract for Deed

    by: William Bronchick (August 27, 2007) 

    Real Estate Lease Option Tips

    by: Dan Ho (January 27, 2007) 
    (Real Estate)

    Real Estate Lease Option Danger

    by: Mark Walters (March 08, 2005) 
    (Real Estate)