LeaseOptionProgram.com

Every package is customized to the value of the property and the tenant’s situation but an example is outlined below:

Foreclosure Bailout Example : Short Sale
Today’s value:	$200,000
Payoff of First Mortgage:	$220,000
Short Sale Purchase Price:	$130,000
Next Year’s sale price (assuming 10% Decline):	$180,000
Closing Costs Estimate:	$15,000
Investor Profit:	$35,000

Client’s Current Monthly Payment Now:	$2,000
Client’s New Monthly Rent Payment:	$1,300

In this example the client is in foreclosure and is underwater in his mortgage. Refinance is not an option. We negotiate the short sale and the investor buys the home for $130K and leases it back to the client for $1,300 per month – well below what they are currently paying. This stops the foreclosure, keeps the client in the home at a payment that they can afford and even gives them an option to buy the home back in a year’s time. Regardless of what the client does, the investor now owns the home at a cost basis well below today’s value. Even if prices fall another 10%, the investor can still realize a decent profit. Even if the market continues to decline, a great profit can be realized. Buy taking advantage of the negative sentiment that exists today, the investor has built in a huge cushion that can be captured down the road. In the mean time, the property is rented and generates cash flow.

Subject-To Example (you buy the home subject to the existing mortgage, which remains in tact and in the client's name)

Every package is customized to the value of the property and the tenant’s situation but an example is outlined below:

In this case, the client has over 30% equity in the home, but is five or six months behind and it will take $10,000 to bring the loan current. His current payment is $1,300 per month total but he can only afford $1,000. He will loose his home and all the equity in it if he does not bring it current. So, you the investor buy the home subject to the existing mortgage. In other words, you bring the loan current and buy the home with the mortgage in place

The total investment in this case is $21,400 and you have purchased $70,000 worth of equity. The foreclosure is stopped and the client begins paying rent for the next 12 months. He then has an option to buy the home back at a price that will net the investor a 200% return, in this case that price is $186,400

Client Exercises Option		House is Sold to a Third Party
Sale Price	$186,400	Sale Price	$200,000
Payoff Existing Loan	$130,000	Payoff Existing Loan	$130,000
Option Credit to Optionee	$10,000	3 months Carry Cost	$4,350
Estimated Closing Costs	$10,000	Estimated Closing Costs	$16,000
		Repair Costs	$7,500
Estimated Gain on the Sale	$36,400	Estimated Gain on the Sale	$42,150
Cash on Cash Return	200%	Cash on Cash Return	232%

Regardless of whether the client buys back the home in a year or not the return is still better than 200% cash on cash.

Tax Considerations

All expenses are deductible. Additionally, depreciation and other expenses and can be claimed as deductions against your personal tax return. You can avoid paying capital gains on the sale of the property by reinvesting in another property and using a registered 1031 tax free exchange agent.

Geographic Regions

LOP.com only operates in and seeks clients in regions that are growing in population. the market does not necessarily need to be appreciating, because exceptional profits can still be realized in a declining market

Note: This is only an example. Every deal is different. A pro-forma analysis similar to this will be compiled for every investment package.

Contact Information

Investment Package — Examples

Short Sale Example (you buy the home for less than is owed on the property)

Subject-To Example (you buy the home subject to the existing mortgage, which remains in tact and in the client's name)

Tax Considerations

Geographic Regions

Contact Information