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Lease Option Executive Summary

Lease Option Executive Summary

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Published by Mark I'Anson
An example lease option executive summary from a real deal
An example lease option executive summary from a real deal

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Published by: Mark I'Anson on May 12, 2011
Copyright:Attribution Non-commercial

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05/12/2011

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Executive SummaryLease Option: No Mortgage Application, No credit ChecksPROJECT NAME: LEEDS3 Bed Terrace
Completion Time: 6 weeksMarket Value (Confirmed by research)£100,000
UP FRONT COSTS
Investor Price£90,000Option Fee5%Extrasnil
Other up front costs:
Total Purchase Price£98,600Reservation fee (paid to Escrow)n/aReservation fee up frontpaid to escrow£2,500Legal Fees (paid to client solicitor)Discount from Market Value10%£10,000Vendor Legal Fees (paid to vendor solicitor)searchesOption Fee5%£4,500Broker Feesn/aLegal Fees1%£900Documentation Fees (paid to Escrow)Mortgage Amount90%£90,000Total up front costs
LOAN AMOUNT (vendor)
IncidentalsVendor Outstanding Mortgage£90,000Setting up letting agentMortgage Rate2.4%£180Due DiligenceOption Value on Completion£98,600
ANNUAL RENTAL YIELD (Standard Tenant on AST)
per month
COMPLETION
Rental Payments£475Weeks to Completion6Management Costs£45% Annual Capital Appreciation6%Mortgage Payments£180Revised Property Value at year 3.5Option Exercised£122,675Net Rental Income £250Revised Property Value at year 7Option Exercised£150,363Total Rental Profit on full termExercise Option Re Mortgage75%£112,772
ANNUAL RENTAL YIELD (Tenant Buyer Scheme)
Vendor Mortgage Settlement£90,000Property Purchase Price (3.5 year scheme)£122,675Equity
£60,393
Rental Payments£675Cash Released
£22,772
Deposit Saved (and refunded)£200Remaining Equity
£37,621
Tenant Buyer Fee (deposit to Investor)
RETURN ON INVESTMENT (ROI)
Standard TenantNew interest based on re-mortgage5%At 3.5 year point
£24,075
Mortgage Interest payment (year 7)£469At 7 year Point
£72,763
ROI at end of term846%
Lease Option Agreement registered with Land RegistryAll fees paid in Solicitors Escow account and released on completion

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