The comments in the video about the percentage down relate to how much control the buyer gets in the property. Depending on what their situation is, maybe they can only put 5% down. In this case, they are usually a riskier buyer. Because of this, the investor should structure the deal differently than if someone can put 20% down. The person who puts that much down is usually more established.

From the investor’s perspective, you try to make the deals one in the same… meaning, all profitable. The reason you present different versions of the deal is because each situation is different.

For instance… Someone may have great credit and not a lot to put down. So for them, a low down payment is great, and they can afford the high monthly expense. This person (especially in this market) would not quality for a bank loan because of their lack of cash. So this person would have to rent, and then one day, when they have enough money saved, they can get a bank loan and find a house. When we structure a lease option deal for this person, we’re basically letting them lease the property from us and then they have the option to buy it at an agreed upon price in the future. This gets that person into the property now, but also helps us mitigate the risk associated with that person’s financial situation.

On the other end of the spectrum, you may have someone who can put 20% down. This person, assuming good credit, could qualify for a bank loan. For them, you may offer to owner finance the property… that is, the investor is the bank. This is beneficial for the buyer because it’s quick and there are virtually no closing costs and origination fees. It’s good for the investor because they receive the interest income.

With each transaction, you have to understand the buyer’s needs. The investor can be flexible while presenting their offer. Assuming we purchased the property correctly, we will have many options for the buyer.