This document discusses strategies for using lease options in real estate investing. Lease options allow an investor to control a property without ownership by collecting rent and option fees from a tenant-buyer. Case studies show how investors have profited from lease options by renovating discounted properties and then selling them through long-term lease options that pay down the principal over time. The document concludes that lease options can combine the benefits of buy-and-hold and flip strategies for savvy real estate investors.

1. INVESTING WITH
LEASE OPTIONS
A low Risk Way to Create Win/Win Situations

2. BENEFITS OF A LEASE
OPTION
WHEN BUYING
• Control the property whether the
market goes up or down without
ownership.
• Ability to negotiate good terms
obligation ends if you don’t meet them.
• Pay down principle
• Buy with no worry of the “due on sale”
clause.
• Buy when there’s not much equity.
• Other ?????

3. PITFALLS
OF
BUYING
WITH
LEASE
OPTION
• Less control (Not on Title)
• Liens against owner
• Owner decides to fight for property
• Owner Dies (Long process with
Heirs)
• Insurance claim, owner gets
insurance money
• Other ??

4. BENEFITS OF A LEASE OPTION
WHEN SELLING
• Starting price can exceed market if payment is in line with
rental market.
• Deprecate the property.
• Capital gains lessens after 2 years.
• Tenant responsible for repairs (typically will take better care
of the property).
• Adjust principle balance if option is not exercised on time.
• Evict rather then foreclose in case of default.
• Collect a non refundable option fee.
• Other ?????

5. PITFALLS OF
SELLING WITH
LEASE OPTION
• Value drops
• Buyer walks
• Vacancy
• Repairs
• Other...

6. IMPORTANT CLAUSES
The payment of a
nonrefundable Option
Fee of SIX THOUSAND
Dollars ($6000.00)
concurrent with the
inception of this Option
Agreement, (the
"Option Consideration")

7. IMPORTANT CLAUSES
The initial agreed purchase price of the Property
shall be: ONE HUNDRED SEVENTY-NINE
THOUSAND NINE HUNDRED DOLLARS, (U.S.)
($179,900.00), until the 30th day of APRIL 2021.
OPTIONER agrees to sell property to Optionee at
given payoff price as referenced in exhibit 1 at any
time Optionee elects to exercise this agreement.

8. EXHIBIT 1:
COPY AND PASTE AMORTIZATION SCALE
Oct, 2018 $782 $208 $179,692
Nov, 2018 $782 $208 $179,484
Dec, 2018 $781 $209 $179,275
2018 $2,345 $625 $179,275
Jan, 2019 $780 $210 $179,064
Feb, 2019 $779 $211 $178,853
Mar, 2019 $778 $212 $178,641

9. IMPORTANT CLAUSES
Balance as referenced by attached exhibit 1 on
particular date of APRIL 30th, 2021 shall increase by
Half Percent (.50 %) per calendar month thereafter
until the exercising of this Option is paid in cash or its
equivalent. Exhibit is not part of this agreement and
stands as sole agreement.

10. IMPORTANT CLAUSES
OPTION TO CALL: Optionor retains the right to call this
Agreement fully due and completed provided that Obtionee has
intentions of exercising this option agreement after the term of
SIXTY (60) months. Upon exercise via notification as herein
provided the principal balance as referenced in exhibit 1 plus
payments due. Notice would provide for SIXTY (60) days to
comply. Optionor/ agrees to allow Optionee grace period of
THREE (3) MONTHS provided Optionee cannot obtain financing.
Exhibit 1 balance shall increase by three quarters percent
(0.50%) per calendar month thereafter time of payoff would be
due.

11. IMPORTANT CLAUSES
PURCHASE AND SALE AGREEMENT: In the event
of the exercise of Option, the sale of the Property from
Optionor to Optionee shall be evidenced by a
sufficient deed and closed as per a standard Real
Estate Purchase and Sale Agreement provided by
Optionor.

12. IMPORTANT CLAUSES
It is specifically agreed and understood that NO
Equitable Title in the Property has been created by
this Option Agreement. Full title vests with
Optionor/Seller until Optionee/Buyer exercises the
herein described Option to Purchase. Property will
be conveyed subject to all liens, encumbrances,
easements and restrictions of record.

13. STRATEGY: COINCIDING LEASE
OPTION
10329 E JAROD JAMES TUCSON 85747
• Usually homes that price
to rent ratio is bad.
• Home Owner still makes
payments on underlying
loan.
• Marketing property for the
home owner setting up
paperwork
• Homeowner will be
responsible
• Still manage the property

14. CASE STUDY: BUY AND SELL SIDE
10329 E JAROD JAMES TUCSON 85747
SELL SIDE
• Optioned out to buyer
• Collected $9500.00 Option
fee
• Assigned Contract to Seller
• House was trashed -$4500.00
repairs
• Collected 2nd $9500.00
option fee
BUY SIDE
• Collected $9500.00
• Original Tenant moved out
• Take care of property
management
• No collection, only help
when needed
Total: $14,500.00 (2014 to present)

15. STRATEGY: PURCHASE WHOLESALE
PROPERTY, REPAIR, SELL (MED TERM FLIP)
4724 S ROSETTE DR TUCSON 85730
• Finance with Private
Investor.
• Keep tax free
working capital.
• Sell to Lease Option
Buyer

16. CASE STUDY:
4724 S ROSETTE DR TUCSON 85730
SELL SIDE
• $149,900 Sale Price
• $6000 consideration fee
• $1100 per Month ($110
discount when paid on time)
BUY SIDE
• Purchased $60,000
• Repairs $30,000 ($90,000
investment)
• Investor 6% + 50% Equity
= $100,000 (payment
$500.00)
• +$7000 at cash out at Close

17. CASE STUDY: FINAL NUMBERS
4724 S ROSETTE DR TUCSON 85730
• $290.00 cash flow X’s 30 months = $8700.00
• $13,000.00 (option fee + cash out refi)
• $145,680 Payoff = 30 months = $45,680.00
• Total $67,380 - $22,840 (inv) = $44,540.00
Home value $147k right now

18. STRATEGY: BUY “SUBJECT TO”
3633 E DREXEL STRA TUCSON 85706
• Sell property with equity.
• Capture Consideration fee and
equity
• Bring in investor for cash

19. CASE STUDY:
3633 E DREXEL STRA TUCSON 85706
SELL SIDE
• $199,900 Sale Price
• $7000 consideration fee
• $1200 per Month ($100
discount when paid on time)
BUY SIDE
• Subject to loan $117,000 (3.8% =
$745.00)
• Investor +$30,000 (6% + $2500)
• Rehab $9000
• Back Payments $14000
• Misc. Cost $3500__
• Total leftover $3500.00 (Cash Out)

20. CASE STUDY: FINAL NUMBERS
3633 E DREXEL STRA TUCSON 85706
• $745 to Wells Fargo + $150 to Investor = $895.00
• $205.00 cash flow X 24 months = $4920.00
• $10,500.00 (option fee + cash out refi)
• $197,800 Payoff = 24 months = $52,800.00
• Total $68,220 - $2,500 (inv) = $65,720.00
Home value $177k right now

21. STRATEGY:
BUY PROPERTY AT 75% AFTER REHAB
200 E HYDE ST TUCSON 85704
• Rehab property refinance with portfolio loan
• Capture Consideration fee and equity
• Capture Cash Flow

22. CASE STUDY:
200 E HYDE ST TUCSON 85704
SELL SIDE
• $179,900 Sale Price
• $6000 consideration fee
• $1100 per Month ($110 discount
when paid on time)
BUY SIDE
• Purchase Price $112,000
• Rehab $10,000
• Misc. Cost _$2500__
• Total Price $124,000

23. Case Study Final Numbers
200 E Hyde St Tucson 85704
• Refinance at 6.25% = $838.00
• 69% LTV / Appraisal at $167,000 = $115.230 cash out
• Sale Price $179,900
• $160.00 to $270.00 cash flow X 30 months = $4800.00 (average)
• $6,000.00 (option fee + cash out refi)
• $112,500 Payoff = 30 months = $66,300.00 (Approx)
• Total $77,100.00 - $11,500 cash tied up = $65,600.00
Home value $167k right now

24. Lease options, blending the buy-and-hold and buy-
and-sell strategies of real estate, might be the best
of both worlds for the real estate investors who
plays his or her cards right.
Thank You!

25. THANK YOU FOR
ATTENDING
Craig Barton
Flipwithcraig.com
1ezbuyer@gmail.com
520-465-4662
Monica Yrigoyen
azproperties@ymail.com
520-471-4711