“Ok, this model home leaseback thing sounds too good to be true. Where can I get burned?” I cannot count the times I have been asked that question. And savvy investors should always be skeptical. Some risks are obvious. The builder could go bankrupt or the builder could decide not to finish out the community. [...]

Other than price appreciation over time which can be significant, the added value is in the specifics of the lease and purchase contract itself. The terms can widely vary per builder. Do they pay taxes? Do they pay HOA? Do they pay for all maintenance/repairs? Do they help me resell the home at lease end? [...]

This is one of the most difficult areas for a new investor of model home leasebacks to understand, or at least to accept. The model homes in most states are not heavily discounted. To get an understanding of why this is, you need to understand why the builder wants to sell his prized model homes [...]