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In the February 2010 Issue of Property Investor News
Free Money, Lease Options
Those of you that have been reading this magazine for more than five years will recall that back in 2005 we started to question some of the 'no money down' (NMD) practices for purchasing residential property which were then so widespread. Our stance was not that some of the creative finance routes then being used were illegal or fraudulent - some were/some not - but that too many people back then had 'get rich quick' fever and were creating property empires built on very thin margins using NMD buying techniques. The results of this era of excess lending practices and excess risk taking are now very apparent as most of our readers will already know.
What some experienced people see today with the lease option (LO) mania of recent months is that history seems to be repeating itself all too quickly insofar as many novice and/or unprincipled investors are being encouraged by a few familiar faces into taking on lease options deals without a wider understanding of the forward risks to themselves or the others who will be closely entwined in their empire building strategies.
Having held two workshops ourselves on this relatively complex subject matter over the last nine months I am amazed at the number of people who are apparently now LO experts and who are claiming to have done a substantial number of these deals in a very short time period. One high profile 'expert' recently admitted half way through a much publicised seminar recently that neither he nor his 'marketing partner' had ever concluded on a LO deal themselves! And yet they were quite happy to be charging almost a thousand pounds a ticket for their event.
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