Another very good reason I am not a proponent of the sublease-option strategy is that, for the most part, the only people that sublease-options appeal to are credit-challenged, would-be homebuyers with a track record of being financially irresponsible. These are people who lack the income and creditworthiness required to obtain a mortgage or deed of trust loan in order to finance the purchase of a home. They are also the same type of people who require constant prodding in order to get them to take care of the property and pay their rent on time. The real problem with this class of tenant-buyers is that 9 out of 10 of them will never be able to exercise their option and actually buy the property. What generally happens in cases like this is that the real estate option expires because the tenant-buyer was not able to obtain financing in order to buy the property. And the sublease-option investor ends up with nothing to show for all of the time, effort, aggravation, and money spent on the deal.
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