The first thing he does is understand what the other real estate is like in the area of Jacksonville, Fl he is buying the home. You have to renovate the house in a manner consistent with the other homes in the area that are selling to maximize your profit. One good way to do this is to visit homes that are for sale in an area and ask a real estate agent for a list of recently sold homes. Again this research must be done in a small geographic area, he picks one small section of Jacksonville, sometimes a single neighborhood.

What makes homes sell in Jacksonville can vary greatly from area to area, so its important to make sure you are looking at the closest most similar homes that will attract the same types of buyers as your homes.

All too often we make the mistake of renovating a home the way we would want it, when it most cases we are not a potential buyer for the home. Take a lesson from my friend in Jacksonville and make sure you understand the potential buyer for your the home you are working on and tailor your renovation/rehab plans accordingly.

The great thing about a lease option is you can find someone who needs 6 months to a year to get ready to buy and work with them to achieve the goal. Its important to team up with a Lender who will help analyze your borrowers credit and put them on a plan to qualify. There is a lender in Jacksonville who specializes in offering FHA Loans to people on lease options, they generate a nice report for the buyer giving them a plan. In most cases they can convert leases to purchases in even less than 6 months. They are a direct lender so they don’t have to broker the deals out which is nice, you get the right answer up front. Their website is www.myRPFunding.com, talk to Lee Utley in Jacksonville. There is also a page about them on my blog.

Anyway I am a little off topic, the key to a lease option is that you can let someone move into the home they are ultimately going to own and live their while they fix any issues that keep them from buying. Its important to get a down payment on the lease option so the buy has some ’skin’ in the game. If they walk away from the deal or don’t do what the lender told them to to qualify they have to lose something. I usually get around $2,000 which is then credited when they purchase the home.

Make sure you set the rent a little higher than the mortgage payment would be, you need the buyer to be motivated to convert to ownership not penalized. This again is where its important to talk to the lender up front to get a payment estimate and base the rent on it. You want the buyer to know they will start SAVING money monthly when they convert from the lease option to the mortgage. The rent you can collect will depend on what part of Jacksonville the home is in, but I have always found you can get a higher monthly rent on a lease option than a normal rental.

When it comes time for down payment I use a down payment assistance company to make up the difference between the $2,000 and the down payment they need. This allows all of my borrower to convert to ownership with no additional cash out of pocket. This is big too, you need to make sure the lender has this program available, I won’t work with any that don’t. These down payment assistance programs are readily available in Jacksonville.

Stay in touch with your buyer/tenant monthly and make sure they are sticking to the plan. You get a rent check from them on the first and thats a good time to make sure they are paying all of their other bills and doing the things the lender wants them to do. I have had buyers in the past that I met with every month on the first to get the rent and to make sure they mailed out all of their other bills. This kind of hand holding can really pay off in the end. The more you stay in contact and keep them on track and motivated about converting from leasing to owning, the better chance you have of completing the sale.

Keep Good Records! Make copies of all of the rent checks you receive. When you can prove to the lender with canceled checks that all rent payments have been made on time it is a lot more solid than just completing a Verification Of Rent form.

If you are currently renting a home in Jacksonville Florida you should consider taking a look at the options you have for ownership. Prices are currently at a level where you can own a home for payments less than rent in many cases. There are many areas of Jacksonville where homes are affordable. The Real Estate Market in Jacksonville is currently perfect for First Time Home Buyers.