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by Jeff Beaubien

Most of us would like to get into a house or real estate for little or no down payment. This allows us to have a reserve of security cash in the bank and allows us to use our money for other things such as investments, vacations, and big-people toys (my personal favorite is traveling).

You may be asking yourself how can you buy a house for less than 5% - 20% down plus closing costs and prepaids (which typically amount to an additional $3,500). My answer to your question is short and sweet - the lease purchase contract.

This real-world example will prove to you how quick and easy it is to buy a home with the lease purchase contract. In fact, this is how I bought my last home that I live in right now:

While sitting at my desk shuffling through some paperwork, I got a phone call from a friend of mine who knew I was looking to move near his neighborhood. He told me that he drove by a beautiful home on a lake that had a For Rent sign in the front yard and that it would be perfect for me. So I drove by the home for myself to see what it was all about. It was perfect!

I jotted down the phone number from the sign and returned home. I did some research to determine what the home might be worth and what the fair market rent was. With my numbers in hand, I drove back out to the home and knocked on the door.

To my amazement, it was Paul and Stephanie who were clients of mine when I was selling insurance a few years ago. I couldn't believe it!

We talked about old times and, in short order, got down to business. They told me that they were asking $1,600 per month for rent. I asked them if they would consider selling their home and they said yes, as long as they got no less than $180,000. I knew from my research that their home was worth a little more.

I offered them the following lease purchase deal: $2,601 down (first month's rent plus $1,000 for the option deposit), $1,650 per month rent, $300 per month rent credit, a term of 4 years, and a sales price of $195,000. They accepted my lease purchase offer without batting an eye.

Paul and Stephanie have a positive monthly cash flow of $480, they have a tenant who will take care of their home as if it was their own (which it is), they have a written sales agreement for $195,000 in 4 years, plus they saved thousands of dollars in real estate commissions.

In 4 years I will have over $15,400 in equity ($400 x 48 months + $1,000) so I probably won't have to come up with a down payment when we close, I paid a minimum amount of money to gain control of a wonderful home, my closing costs are delayed for 4 years, I will profit from any appreciation in value of the home, I don't pay any taxes and I have a limited exposure to liability. This entire "lease purchase" process took less than two days to complete!

And my personal favorite, if I decide that I no longer want the home, I can assign (sell) my lease purchase agreement to a third party for a tremendous profit! (This is covered in Jeff's Lease Purchase course.)

People do this all the time. They are doing it as I type this page. Real estate brokerages have entire divisions set up to exclusively handle lease purchase deals. If all these people can do it, you can do it, too.

Without a doubt, the lease purchase contract provides for the best financing terms you will find in any free market in the world. The numbers never lie. It truly is... real estate with little or no down payment!