Bartering and Lease Purchasing
Barter: To traffic or trade by exchanging one commodity for another.

My first experience with bartering was as a kid on the streets of New York City, specifically the Inwood Park area of upper Manhatten in the early 60’s.

In those days we traded baseball cards, bottle caps, Pensy Pinkies, marbles, comic books, records, you name it, whatever worked. It was a great way for a kid to learn some basic business negotiating techniques (although I didn’t know it at the time) and to also have some fun. (How else could you ever get a Mickie Mantle and Sandy Koufax baseball card for only 1 Roger Marris).

Cavaet (Barter) Emptor-Let the trader beware

As then, good horse trading is a valuable skill and a great way for the savy investor to do business. Nowadays, I still barter, but with Options and Lease Options on properties that I find. All the purchase terms, including the price, the closing costs, the terms of the contract are pre-negotiated, but have been locked up for a mere pitance. I have found that I can control large assets for little money, less liability and overhead with this concept. I can then utilize the contract or the cash flow for trading purposes. The only difference now is that I utilize my specialty of creating capital and cash derived from Options as my trading vehicle.

"I negotiate like a buyer, but finance like a renter."

Here are a few of the strategies that work the best after we have gained control of a property : Strategies

1. Sublet: I find a property and sublet it (rent to another at a profit) and can barter the cash flow
and the potential profit at the close.

2. Assignment: I can trade the entire contract (with or without a Tenant/Buyer).

3. Sale: I can sell the Optioned Property and use the proceeds in an exchange (ala’ 1031).

4. Hypothecate: I can use the stream of income (created by subletting or sub-Optioning the property to another) and trade the actual cash flow. In many cases I can use this technique as security for another deal.

5. Collateral: I can use a good deal with a projected profit as security.

6. Notes: Taking back a note (aka: trust deed or 2nd) and trading that note for a another property or as option consideration in another deal.

In Summary:
Lease Purchasing and Bartering are two concepts that can work very well together for smart investors. Our goal, in any good trade, is to obtain something we need from one party and provide something that we have of value to that party or even a third party to make a transaction occur.