MichaelC

jr, I know the name, but I haven't dealt with him in any way personally. He is a long standing participant in the creative real estate field, and one who is highly respected. Perhaps someone can come along with a more personal perspective.

Benjyjim, that objection you hear is, without question, objection numero uno. I hear it daily, too. Everybody wants all cash, all the time. Truth is, in some cases, the homeowner really does need it. OK, we don't fight 'em, because we'll lose every time. Wish 'em luck and move on. I always suggest a refi as a possible win/win solution to their dilemma. It allows them to pull out the cash they need, and probably with interest rates so low, it may lower their monthly payments, as well. As you alluded, now they have their cake and can eat it, too. As for the lender, they are usually not a problem. They will ask for proof that the present property is going to have the payments on it covered. That is a simple matter of showing a signed lease agreement on the property.

Hi, JimmyD, and welcome to The Naked Investor. Everyone here either is a rookie now, or was at one time. So we can all probably understand the excitement and confusion you are feeling right about now. My first bit of advice, my friend, is to TADBAR*. You need to slow yourself down and organize your approach to these properties that you're looking at. As for folks on this board offering you advice, I'm afraid we don't have enough information for that. What are your plans with these properties? Are they presently rented? How much? What is the FMV? Outstanding liens? What work is required? What is your credit situation? Etc........ You can see, JimmyD, there are way too many variables that need to be plugged into this equation before we can even begin to help you. I'm not trying to throw cold water on your enthusiasm, nor am I trying to intimidate you into forgetting about real estate. But, I don't want to see you rush into something that you might not possibly be prepared for. A mistake now stops your real estate career in its tracks. If I could offer you any advice tonight it would be to do narrow down your interests to one or two areas. Focus on those, begin to study, ask a lot of questions, come back here often, and begin to learn. It's a process, JimmyD, not a get rich quick scheme. The success you have tomorrow will be determined, in large part, by the foundation you lay down today. *Take A Deep Breath And Relax

Dave, your lender sounds like he is living in the real world.

I do understand now, Tony. I still think it is an individual preference. The Registered Agent is simply the "point guy" for your LLC. If the LLC is being sent any type of official documents, or is being sued, there needs to be a publicly known address and individual where these papers can be sent. Using a representative or attorney would not shield you from a lawsuit, should that ever occur. Keep in mind the purpose of the LLC is not to hide your identity and make you an unknown entity. It is for the purpose of shielding your personal assets from any liability. That said, using yourself as the Registered Agent does not expose you to any more risk than if you used an attorney or other agent.

Tony, the information you provided about the address is correct. As for hiring an attorney, that is a personal decision. I opted to do it myself and it literally took fifteen minutes to set up two LLC's through the Florida Secretary of State website. I suggest you start by visiting the Virginia site and see if the process is something you are comfortable with. They may even have a support phone number to provide assistance. Florida does.

Tony, I was referring to additional or future rent credits. The rent credits earned during their first twelve months remain in effect.

Thank you, Scott. Excellent post and most helpful. Even though these are all common sense ideas and probably already known, they are all critical marketing techniques that need to be revisited often.

Jim, I will pass along this thread to her so she can contact you.

In addition to the hard copies that are included in the manual, I also include electronic versions of all my contracts, forms, and a variety of documents. They are in MS Word format. This enables you to save all of them on your hard drive, and make a back up disc, also. Once you have the electronic version, you can make changes, deletions, additions, etc., to suit your specific situation and deal you are working on. The total number of documents included with the manual is 23.

Samantha, I can appreciate your apprehension about taking the plunge into a new venture. Scott is correct when he says the intimidation factor is a big hurdle to overcome when you are beginning. However, you have the advantage of a support group right here. You are not in this alone. There are others just like you on this board, at the same level, who are willing to share their experiences and how they overcame their fear factor and Paralysis of Analysis. There are others of us who have more experience and we can guide you, as well, as your questions arise. You don't say where you are located, but much of the country is a sellers market these days, and has been for several years. While that may make creative deals of any kind more difficult, it does not make them impossible, Samantha. Sure, we have to work harder to find the deal. We need to be more creative. That's why I cover other techniques in my manual beside the sandwich lease. In the real world not every seller is going to have that level of motivation. But, I am not here to sell you a get rich quick scheme, and hard work should not frighten you. If you are willing to make the effort, I and others here are willing to provide the support. You say you are "so ready to get into investing". Then do it. Follow your heart, my dear. Whether it is my manual, or another is irrelevant to me. You are welcome here and I will do all I can to see you get that first deal or three.

Marcie, did you ever hear the expression "You can't see the picture if you're inside the frame."? That's what we have here, it seems. We have a tendency to become emotional during the sale and purchase of real estate. In your case, perhaps even more so because you are buying as a means of helping your daughter. The danger with this is that we have a tendency to lose our perspective and intellect, and we allow ourselves to think with our heart instead of our head. In other words, this is becoming an emotional decision, rather than an intellectual one. You know, or at least should know that this seller must comply with local code to sell their property. Your inspection tells you permits were not issued, and perhaps some of the work done was not done well, either. If this seller is adamant about not wanting to correct the paperwork and the shoddy construction, they are going to have this same problem with every potential buyer. If you want the property, make an offer that reflects what you believe is fair. Don't hesitate to toss in a few contingencies and addendums, either. Something along the lines of all work having been done will require proper permits, and that the offer is contingent upon satisfactory repairs to any existing problems that your inspection has uncovered. Let your offered price reflect what you believe to be the accurate FMV. You'd be surprised how many sellers will become much more open to an offer that is in their hands, in writing, versus an offer that is verbal and emotional. The written offer eliminates all emotion from the transaction, and that's what you want. You never want to be the motivated buyer. The worse case scenario is your offer is rejected and you move on. There are other properties that will suit your needs just fine, Marcie.

Benjyjim, whatever materials you may have are fine. You are certainly under no obligation to spend any money here. That is not what this board is about. If I, or anyone else here can help you, we will. You're drowing in data because you are concering yourself with much of the little details that don't matter today. All of what you are concerning yourself with now, while perfectly legitimate, shouldn't concern you today. Your biggest obstacle and what should be your only objective today is to be speaking with homeowners about lease purchasing their property. Every thing else is secondary at this time: tenant/buyers, contracts, etc. You'll find, Benjyjim, that the most difficult part of this business is locating the homeowners who will lease purchase their property. This is why you need to spend the bulk of your time in pursuit of this activity. Having said all that, the good news is you're staying organized. No small factor in being successful. I can't recommend any particular software program for helping in this matter. I am not much into the computer-high tech stuff. I use my own organizing methods which, in this day and age, is decidely low-tech. But, it works for me. If you hear of anything that fits your needs in this matter, please pass it along on the board. I'm sure there are others than can use the help.

Tony, are the contracts legal in every State? Yes, they are legal. They may require an addition or a deletion here or there. Or, pehaps something needs to be reworded a bit. But, for the most part the various contracts and agreements I use will serve you well. I know for a fact they have been used without problems in NM, CO, CA, WA, FL, TX, IL, MD, Washington DC and a host of other states, as well. Having said all that, I will also say that it is probably a good idea to have a local real estate attorney review the docs for use specifically in your locale. That shouldn't cost much and is inexpensive "insurance". But you don't need to do it now, so don't sweat the small stuff. Let's find a willing seller first, then we'll move on to the next steps. In addition to the hard copies of all my contracts and documents which are included in my manual, you will be receiving electronic versions, too. Once received it is a simple step to saving them to your hard drive, and backing them up to disc. And they may be customized to your satisfaction to meet any situation that may arise in any deal you are working.

Generally, that is correct. When working the terms with the homeowner it is our objective and to our advantage to have as long a lease term as we can get. Thirty six months is fine. Forty eight better still. On the other hand, when setting up your deal with the tenant/buyer, the advantage is in setting that agreement up in twelve month increments only, (with an occasional exception, of course). Twelve months passes quickly, and when the end of the Agreement is approaching, you have a number of options available, all of which favor you. The tenant/buyer can exercise their option to purchase: back end profit for you. The tenant/buyer can simply elect to walk away from the property: you have already collected nonrefundable option consideration twelve months ago, plus whatever monthly cash flow you have been receiving. Now, you find new tenant/buyers and begin the process anew. This means more option money and monthly cash flow. The tenant/buyers can ask for an extension: if they have been good, (maintained the property and timely payments), you can approve that request. When doing so you have the option of collecting additional nonrefundable option money, (half the amount you collected originally? That's my standard but you may do whatever works between parties). You may raise the rent and the purchase price if the market justifies it. And, I always eliminate the rent credits after the original agreement expires. Enough is enough, and now I want them to realize this is serious and they need to purchase or lose. The bottom line is control a property for as long as a period as you can negotiate. Sublet in twelve month increments. You'll do well.

Hi Benjy, and welcome aboard. We're glad to have you join us. You say you just discovered the lease purchase concept? Quite an eye opener, isn't it? The Naked Investor is all about the Lease Purchase Advantage. I realize I have a biased perspective, , but you've come to the right place, my friend. For starters, your early experience is not unusual. The easy part of this equation is finding the tenant/buyers. One well worded ad will pull them in faster than roaches on crack. Of course, that means the difficult part of the equation is finding the properties to meet that demand, and you need to start by concentrating on finding homeowners open to your creative ideas. There are two ways to find those sellers: call on every FSBO and FRBO you can find, and market like a demon so they can find you. As for determining FMV, that isn't usually difficult. There are a number of free online sites of varying quality. There are also a number of services you can pay for, ($10 per address, not a bad deal at all in my opinion), online as well. However, my advice for now is don't worry about things like comps today. Today, you need to find a seller willing to deal with you. Then, we can help you with all the other fun stuff. Stick around, Benjyjim. There's a place waiting for you on the Real Deals page.

Joe, Page 3, Paragraph 17, Encumbrances. However, if you want to add an additional sentence or two, that's fine, Joe. By all means, do what is necessary to be comfortable.

Yeah, and after the teeth fall out and the new ones grow in, we get to pay the orthodontist to straighten 'em!

Little Julianna Carbonare lost her first tooth this morning before heading off to kindergarten! Woohoo, Julianna! Way to go, PumpkinPuss . It's fun having a five year old in the house.....usually. Now, as for my 14 year old daughter.........oh, boy. All I can say is thank God for thirty year old Scotch .

Tony, I didn't think you were from Saudi. I figured you were US Military prepping for what looks like another Middle East war. Where in Saudi Arabia are you? What's the general consensus on what's going to happen, and when. Do you get to mix with the local citizenry there? I'm curious as to how they feel about US Military personnel. Absolutely, you will receive a military discount.......one hundred percent! In fact, I'm embarrassed I didn't offer it first! If you want me to ship your free copy to an address in the States, Tony, I will do so, on me. As you're returning fairly soon, I gather, this might be your preference. PM me your address and it's on the way today. If you prefer for me to ship it to you in Saudi Arabia, I will do so only for the cost of shipping. The Post Office estimates the cost of delivery at $21.00 However, I am told they only deliver to Dammam, Jeddah, and Riyadh. If this is your preference PM me with that address and we'll arrange the details to get it to you there. God Bless all the US Military personnel and our Allies !

Hi, Dave. Yes, this was an awful tragedy. We always take things for granted, and the safe completion of another NASA launch is no exception. This was a painful reminder that things sometimes go wrong, and do so in the most unexpected ways on occasion. What can we do or say? We shake our heads, we shed our tears, and we try to make sense of the chaos that is the World.

Saudi Arabia? Korea? Isn't there anyone from my beloved Italia?? I need a good recipe or two .

Danny, you're welcome. Now we need to get you from "basic understanding" to advanced wheeler and dealer. Why not register, ask and learn, answer and share, and have some fun in the process? Stick around and we'll help you get there any way we can.

Amen to that, Summer. How awful !

Danny, verifying you are dealing with the homeowner should be a matter of routine for you. There are a number of ways to do it, none of which are especially difficult. Basing the effectiveness of your marketing on only 20 mailings is not at all accurate. You will need to do many more to accurately gauge if this one technique is working. Keep in mind that marketing is a key to your success. You must market like your future depends upon it because it does. Be persistent, be consistent, and be varied. Then, after three of four months you can begin to determine what is working and what isn't.