lease options pwerpnt

Lease OptionsThe Legal Gibberish

Redbird Conveyancing Limited• Founded in 1st April 2010• Two partner firm

• Specialist property lawyers• Buy and sell residential and commercial

property• Commercial leases• Lease options

• Doing lease options since 2008

admin@redbirdltd.co.ukE

#

@Redbird_Ltd

Redbird Conveyancing Limited

01706 281 016

Pamela O’Brien

Lease Option Timeline

Negotiation Phase

Drafting and Execution

Phase

Completion Phase

Management Phase

Purchase Phase

Keys to Successful Lease Options: Communication 1 (Vendor/Estate Agent)

• You are selling YOU• Experience• Enthusiasm

•Not a sale•Win-win•Build trust

Keys to Successful Lease Options: Communication 2 (Vendor)

Heads of Terms• Term (length)• Purchase price• Mortgage• Insurance• Improvements• Assignment/sale

Keys to Successful Lease Options: Communication 3 (Lawyers)

• Find a lawyer for each party who understand lease options (not this guy)• Get fee quotes up front (no surprises)• Provide complete heads of terms• Don’t act like a fraudster (or a jerk)• Set clear, realistic deadlines

Keys to Successful Lease Options: Understand the Mechanics• Option Agreement• Sets terms (length, purchase price)• Allows you to buy• Allows you to assign

• Management Agreement• Allows you to rent and insure• Allows you to renovate• Allows you to sell

• Power of Attorney• Allows you to deal with third

parties

Case Study 1:Conversion to “Multi-let”Purchase Price - £150kSingle rental - £650/moConversion - £8,800Multi-let rental - £2,000/moOption fee - £425/mo“Run” costs - £610/moMonthly Profit - £965

£965 X 72 months = £69,480 gross

£69,480 - £8,800 = £60,680 profit

6 Year Term

Case Study 2:Assisted Sale

Purchase price - £100kRefurb - £11,400Multi-let rental - £1,680/moMortgage - £209/mo“Run” costs - £425/moMonthly profit - £1,046Sale price - £130kSelling costs - £2,800

10 Year Term

£1,046 X 36 months = £37,656 gross£37,656 - £11,400 = £26,256 net rental

£130k - £100k - £2,800 = £27,200 net sale£26,256 + £27,200 = £53,456 profit

Keys to Successful Lease Options: Tricks & Traps• Insufficient due diligence• Vendor debt (equitable charge on

Case Study 2)• Enforcement orders/unlicensed

HMOs

• Lack of control of vendor• Restive relatives• Mystery partner• Disappearing vendor• Gnomes

• Flats• Service charges• Disputes with management co.• Restrictions on alterations• Forbidden subletting

• Tax• Stamp duty• Changes coming in 2020 to

landlord allowances

Keys to Successful Lease Options: Where Are the Deals?!• Talk to Rob!• Make friends with at least three

estate agents• Lease options are good for them:

two bites at the apple• Unsaleable properties• Vendors who need quick ££

• Posters in local shops

• Family and friends• Great route to exhausted

landlords• “Starter” lease options

• Mailings to “small shop” lawyers• Matrimonial homes – vendors

often desperate to get out• Probate properties – poor repair

Other Lawyers Who Do Lease Options• Chris Coates

Coates & Co. (Wales)0788 989 1138chris@coatescompany.co.uk

• James BorlandSam Hawking & Co. (Port Talbot)01639 884 884james@samhawking.co.uk

• Trish BartonBarton Legal (Leeds)0113 202 9550

• Andrew BrownMS Law (Manchester)0161 772 4500Andrew.Brown@ms-law.co.uk

Keys to Successful Lease Options• Have a goal

• Build your team

• Find the deal

• Get a life

Redbird Conveyancing Limited

Office 5, Market Chambers, Market PlaceRamsbottom, Bury BL0 9AJ

admin@redbirdltd.co.ukE

#

@Redbird_Ltd

Redbird Conveyancing Limited

01706 281 016

Pamela O’Brien