Creative Financing - Lease Options Explained

Creative financing is simply structuring seller-financing deals with little to no money down without using traditional bank financing for real estate deals. Lease Option Investing is a creative financing strategy that real estate investors can use. Also referred to as a “Lease-to-Own,” “Rent-to-own” and/or “Lease with Option to Buy.” A lease option consists of two agreements: 1. Lease Agreement 2. Option to Purchase Agreement These 2 agreements may be incorporated in one document or two separate documents. In a lease option agreement, the title to the property remains with the landlord until the tenant exercises his or her option and purchases the property. In other words, the starting point of this kind of an arrangement is a tenancy, not a property purchase transaction.