As a real estate investor you may come across property that would be a good deal except for the fact that it is currently considered not habitable. It could have some smoke damage from a fire or some other issue. Despite the damage, the property may still be desirable and valuable after fixing. The problem is that property that is not habitable does not qualify for financing. You can only buy it with cash. Even if you have enough cash to do so you should also consider the fact that you will need additional cash to fund the necessary repairs. This represents a huge sum and cash layout that may not be advisable. This is a situation where you can use the fixer-upper lease option strategy.

With a lease option, the property does not have to qualify for bank financing. You do not need to get a loan. You do not even need to put out a sizable down payment. All you need to produce up front is the option consideration payment, which is just a small fraction of the usual down payment. You then get the right to lease the property with an agreed upon monthly rental and the right to buy the property on or before an agreed upon deadline at an agreed upon price. Once the contract has been signed, you can already start your repair work.

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