Why Use A Lease Option Company?

"Man, you aren't going to believe this!".















This is how the conversation began when my partner called me to explain the situation on one of our homes we have available for lease option. To which I responded, "Brother, I have been through so much stuff in my life that I promise you, I will believe anything you tell me.".

He just laughed, knowing from some of our business experiences together that this was true. I had the first hint that something was wrong when I sent a lease option client to view a home and she called me back upset because I had sold the home. Caught completely off guard, I asked her what she was talking about. She indicated that when she got to the property that I sent her out to see, she met the current tenant who indicated that he had purchased the home two days prior and had moved in with his wife and ten children (yes, that is ten with a one and a zero).

It was one of the few times in my life I truly didn't know what to say.

I asked her if she was sure she had gone to the correct address, she said yes, she printed out the photo of the home and it matched the home and address she had been to. At this point, I had no explanation and I indicated that I would have to call my partner and ask him if he had sold the property without telling me (we work together in a variety of capacities and this particular home he personally acquired and controlled). I called my partner, explained the situation and he too was dumbfounded.


After a little digging, here's what we discovered:

My partner acquired this particular property via a short sale negotiation. The property had been vacant for several months. The owner who owned the property BEFORE the owner that he acquired the property from had given a key to the neighbor across the street, presumably as a backup in case she ever got locked out.

Seeing an opportunity to make some fast cash, this neighbor then entered into a lease option agreement with the gentleman with 10 kids. He took money for the lease and a security deposit and allowed him to move in. If you are unfamiliar with the short sale process, short sales are negotiated on properties that are headed for foreclosure to be sold on the courthouse steps. So, the opportunist neighbor allowed the gentleman, his wife and 10 kids to move into a property that was in foreclosure and if short sale negotiations were unsuccessful, would be sold and the tenant would be evicted by the bank even though he had executed a lease and paid his lease payments.

What makes this story even more heart wrenching is that this particular property happens to be on a lake in Conyers and is almost 6000 sq ft and it was leased to the gentleman for $1500 a month. This property currently has a fair market value of $500,000. The gentleman, his wife and 10 kids believed that their luck had changed when they were able to acquire such a home for such a nominal amount.

After a little explanation of his rights, the gentleman went down yesterday and swore out a complaint to have the opportunist neighbor arrested. With any luck, we will help him get his money back from the opportunist neighbor as well as money to move. Though our first instinct was to work a deal with the gentleman to help keep him in the home, he unfortunately cannot afford it and doesn't want to live across the street from the opportunist neighbor who swindled him (though my guess is that the opportunist neighbor may be taking up a new residence courtesy of Rockdale County in the very near future). In any event, my partner and I have agreed to help cover the cost for this gentleman to move and are giving him the time he needs to make necessary arrangements. The moral of the story, "Caveat Emptor, Let The Buyer Beware".

If you enter into a lease option agreement, lease purchase agreement, rent to own agreement, contract for deed, land contract or owner financing deal, be sure to check the county tax records to see who the owner of record is to ensure that you have a legitimate deal in place.