lease options pwerpnt
TRANSCRIPT
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
#
@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 [email protected]
• James BorlandSam Hawking & Co. (Port Talbot)01639 884 [email protected]
• Trish BartonBarton Legal (Leeds)0113 202 9550
• Andrew BrownMS Law (Manchester)0161 772 [email protected]
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
#
@Redbird_Ltd
Redbird Conveyancing Limited
01706 281 016
Pamela O’Brien