Frequently Asked Questions - Lease/Options for Investors

The money a tenant puts down (OPTION FEE) and a portion of their monthly payment (RENT CREDIT) is converted to a down payment at the end of the lease.

Purchase agreements come in 2 flavors: Appraised Value or Set Price.

Appraised Value A price determined by a licensed real estate appraiser at the end of the lease.The benefit with this method is that the property will be purchased at a fair value. The disadvantage of course is that the property could dramatically decrease. An alternative method is to have the buyer and seller select an appraiser and pick the average of the 2.

Set Price A price agreed by you and the buyer/tenant. The benefit with this method is that you will have peace of mind as to what the price will be at the end of the lease.

Neither. There is no guaranteed way to avoid taking a loss at the end of a lease/option contract. HOWEVER, your chances of losing money are minimal as less than 90% of lease/option tenants ever exercise their option to purchase.

The option fee is a non-refundable amount of money required to secure a purchase agreement. The option fee is determined by you. We take 50% of the option fee unless it falls below $1000. For example, if the option fee is $4000, Limestone gets $2k and you get $2k. If the option fee is only $1000, we take all of that option fee. You can get a general feel of option fees by looking at our inventory.

No. We have discovered that folks who put a bunch of money down with the intention of purchasing a home make better tenants. There are no exceptions to this rule.Here are the 5 reasons why no questions are asked:

1	Anyone interested in doing a lease/option has bad credit. If they had good credit they wouldn't need to do a lease/option.
2	We have over 300 people each day looking at our properties because they have money and want to move fast.
3	Folks who pay double market deposits and a premium over market rent generally don't want to lose their investment.
4	80% of our lease/option candidates are moving from out of state and don't have a background to check.
5	Having managed properties for over 20 years, we have learned that money talks and background checks are dubious at best.

You can lose money if real estate continues to fall. In some cases, if the buyer/tenant exercises their option and the contract is for appraised value, you could lose money if the appraisal is less than what you purchased the property for. If you have a set price contract and the housing market heats up, you may lose opportunity to sell it at a higher price. There is no guaranteed way to make money in real estate. Anyone who can promise you a profit is pulling your leg.

Probably. This person will be buying your home. If you have problems with this then you need to go back to making less money with a straight rental. The only exception to this rule is condo/townhouse restrictions. If your property has restrictions, let us know now so we can save everyone a bunch of time.

No. Most investors think they can predict the behavior of a buyer/tenant based on their profession or background. They had a bad experience with a renter and think they can use the same principles for a buyer/tenant. Statistically, a buyer/tenant who puts down a huge chunk of money down and pays a premium per month is better than a straight renter. After a deal closes, you can ask them as many questions as you like but we don't recommend opening Pandora's Box.

Yes. We believe that our services cannot be matched and do not make our investors sign "exclusive agreements." If you find a tenant before we do, we just ask that you are courteous and tell us immediately that you have found a tenant. WARNING: Nearly all of our competitors have exclusive contracts which means you will have to compensate them even if we find a tenant. The biggest mistake you can make is to place a tenant and hide it from us. A simple phone call, text or email is fine - we don't take it personally.

No. We only make money if we find you a tenant. After we place a tenant, we charge a yearly fee of $100 which covers contract monitoring and evictions if necessary. If you want us to collect rents for you, we charge 10% of the gross. Since your buyer/tenant is paying for the first $500 in repairs, it is not necessary to pay us for managing your money.

They get get better tenants, more money, less turn over and the tenants are responsible for the first $500 in repairs after the initial move in.

You are required to pay taxes, garbage and sewer since these can potentially create liens on your property. You don't want anyone else responsible for them. EXCEPTION: Recently North Las Vegas has included water as a part of the sewer bill. This is has created some confusion among our clients. If your property is in North Las Vegas, you will pay water and your tenant will reimburse you.

We recommend that you have a preferred vendor maintain the pool and that the tenant pay you. By putting a flat fee in the monthly (about $100) you can eliminate a lot of confusion. When your property is posted, this item will be clear on the property details.

We have been improving our processes, increasing our network of agents and continually add prospective tenant/buyers every day to our distribution list. We have marketing down to a science. It is not unusual for a competitor that we trust to call you and negotiate a deal.

No. This throws a lot of investors off. Today's value has nothing to do with a lease/option contract. The only purpose of putting today's "Estimated Value" is to provide potential buyer/tenants a frame of reference. It is not the price they will purchase your property. Inflating this value works against you. By inflating the value of your property, you will get fewer prospects and you lose credibility. Remember, our job is to bring you a deal. You decide if you want it or not.

Yes. We don't take it personally. If you find a renter, decide to sell the property or give it to your sister, we just don't care. What tweaks us are people who have it rented for 2 weeks and didn't have the courtesy to tell us. A phone call, text or email is all it takes. Peace be with you. By the way. We have the right to fire you as well. If we find out that you are unethical or make everyone's life difficult, we will mail you your keys.

The speed at which we place a tenant is a function of price and property condition. If for example, you want to charge $3k for a small house that's about to cave in, we will never find a tenant for you. After we see the property, we can give you a price that we think we can move the property within 6 weeks. If you want the property to move faster, you can lower the price.

No. There is more competition in the standard rental market. Since we already have a line of over 2400 buyer/tenants looking for a lease/option, we are able to fill lease/option properties faster.

Please!!! Download here. Every month some newbie investor wastes our time because they really didn't read this page or our contracts. You can save yourself 2 mortgage payments if you read it now. Give it your lawyer, accountant, real estate agent, mortgage broker and anyone else you feel necessary to have it blessed with.

Yes. Tenants are evicted every month for non-payment. One of the benefits of Nevada is that eviction processes favor land owners. Tenant/buyers are warned in advance that there is no mercy and that they will lose all their money if payments are not made on time.

Stay in touch! The biggest problem we have is investors leave town and don't tell us in advance. If you are missing in action while we have an interested tenant/buyer, we will give them to someone who is paying attention. Every month, some investor loses 2 months of income because they went MIA at a critical moment.

There is a 30 day grace period after a tenant moves in. After that 30 days, your tenants are responsible for the first $500 in repairs. If something greater than $500 crops up, you are on the hook to get it repaired in a rapid fashion. Generally, tenants will call us first and then we will call you with recommendations and complete access to our vendor list.

There is always a little bit of turbulence as most buyer/tenants don't have the luxury of doing a walk-through prior to moving in. If your utilities are not on, they don't have the opportunity to confirm that the appliances or A/C is working properly. Standard procedure is to give them 30 days to make sure everything is working. If there are problems, you will be required to fix them and/or compromise to bring the property up to specifications. After the first 30 days, your tenant/buyers will pay the first $500 in repairs.

Yes. We provide one on one counseling and hook them up with our experienced credit repair vendors and mortgage brokers. We even check in on them from time to time to give them words of encouragement and offer free advice on personal financial matters. We sincerely want them to own a home and do what we can to help. These people are our customers for life. HOWEVER, we don't do the work for them. Despite our efforts, 90% of our buyer/tenants don't exercise their option to purchase because they did not actively clean up their credit, maintain a steady income or simply decide Vegas isn't for them.

No. Insisting that your tenant/buyers purchase renters insurance is just a battle you don't need to fight. The only benefit to you is that it covers your appliances. Since you followed my advice and only purchased used appliances, who cares? Do you really want to kill a deal over a $150 dishwasher?

You do. After the first month, you receive all the monthly payments. We highly recommend using "INTUIT" as they only charge 50cents per transaction and makes tracking payments super easy.

Not necessarily. An occasional buyer/tenant will insist on it. The lease/option business is riddled with owners who take money and then stop paying the mortgage. Only a few buyer/tenants insist on this approach because just one late payment will destroy a purchase agreement.

No. Most buyer/tenants and investors can walk down to the Title company and knock out the transaction in an hour. However, if you want us to walk down there with you and hold everyone's hand, we charge $500.

There are a million "what if" scenarios. Generally, if a tenant leaves a property in good order, we let them ride off into the sunset and don't send the sheriffs. If they elect to extend the option, it's in your best interest to keep similar terms and let them continue. If a buyer/tenant rides off into the sunset, the option fee and rent credits are forfeited.

Read our common mistakes and tips. Every week, one of our investors commits a sin that costs them at least $1000. You can earn $1000 right now by reading through those 2 pages.