MichaelC

Hehe. It was 7 AM ET, Tim. I think you need to check your settings on the board.

I almost always offer to do the deal as a CA, (unless the numbers and homeowner's motivation are so great as to make the deal worth remaining in the middle). I offer my expertise, know how, and pro-homeowner agreements as an inducement to the sellers. In short, I pitch what we now know as The Lease Purchase Advantage. As for which markets, I look for balanced or buyers markets. These days, that means avoiding areas such as where I am in south FL, and many of the major metro areas. Smaller metro areas, in and around the Midwest for example, seem to work well for me.

Concise and clear explanation. Thanks, Tim.

Tim, regarding the specifics of John's mailings, I can't tell you what his plan is. Why don't you shoot him a PM on the board and ask him to take a look at your questions here? The deals I do out of my area are usually with the help of the homeowner. If they are still in the property or at least in the area, I handle the marketing and take the calls and emails. The homeowner is instructed to show the property and sell the amenities, the neighborhood, etc. But all talk about the deal and terms are referred back to me. If the homeowner has already left the area they must have a plan in place for showing the house: neighbor, friend, relative. I prefer that to using a Realtor and having to share some of the pie. But if all else fails, I would use an Agent. After all, a percentage of something is better than 100% of nothing.

Hi, Tim. I don't know where John orders his postcards, but you can have cards or brochures or flyers made at any local printer, or you can do so online. For design, have you tried Fiverr?

Don't know the "major guru" in question, but I see no need for including an arbitration clause. I would listen to your attorney.

I suppose. But if we end up in the same cell, the bottom bunk is mine.

MJ, each deal and scenario is different. What will be a good fit for one deal and the seller may not be for another. Play it by ear and don't let the "what ifs" bog you down.

MJ, I have heard of that, as well, but to me it smacks of seminar BS. Unnecessary, but it makes the person saying this appear wise, I suppose.

Marius, I'm not in Tampa so I can't help you there. Down my way, attorneys are a dime a dozen. . .even cheaper. Hell, there's more attorneys here than roaches, and that's saying something. I try to avoid lawyers as best I can. Not difficult to do since I mostly do Cooperative Assignments.

MJ, in all three approaches you are going to need to deal with the homeowner at some point in the transaction. It's sort of a "pick your poison". Personally, I'm not a fan of the tax man, so I'd probably opt for 2, (if I were a Realtor). Have you spoken with a title company or attorney to get their feedback?

13c: correct. 19b: purchaser will pay all allowable closing costs

Hello, Lynn! No, I haven't used one. Pros and cons? They come to you is a plus, but you'll pay for the convenience.

Mike, what is your estimate of the property's value, and what will it rent for? The longer the term, the better for you, of course. 36 months is good, 48 or 60 even better. Any appreciation that kicks in over the lease is yours, obviously. If the market unexpectedly tanks, you can always hand the keys back to the owner at the end of the lease and walk away. In the meantime, you've been receiving cash flow. . .assuming his $1,100 monthly that you took over is below market rent. As for purchase price, you can always set it up so the payoff balance at closing the price. Just be sure to confirm before hand what his balance is presently.

Sounds like a catch phrase for a financial scammer, er advisor.

Marius, When Steve talks, people listen. He's been at this a long while and knows his stuff. With that said, keep in mind there isn't any one, specific way to do this. For example, he collects $40. If I were to tell you I collect $30, it isn't any big deal. Also, my preference is to collect a deposit at the same time I receive the Lease Application and fee. The more the better, of course, but the purpose is to weed out the curious from the serious. $500, $1K, an amount equal to one month's rent, etc. I offer a simple, straightforward receipt that states the amount, the date, and that the deposit is nonrefundable unless the application is rejected. If the app is accepted it is part of the required option consideration.

A CYA letter can be just about anything. Did you have a specific concern? But I do think that as a licensed Realtor the requirements for you are a bit more stringent than for a mook like me. Full disclosure is your friend.

The reason I use allowable is because what a tenant/buyer can and cannot be responsible for regarding maintenance and closing costs will vary from locale to locale. So this provides some wiggle room. For example, let's say a t/b decides to exercise their option and is going with a VA loan. Regardless of what our agreement might say, the VA will require the seller to pay certain closing costs. Therefore, the t/b will pay all allowable closing costs.

Kind words, Marius. Thank you!

The sooner you can record the Memorandum, the better obviously. However, even without recording the Memo, the deal is still legally binding. The Memo serves more as a cloud on the title, rather than giving the deal more legal standing.

I always use the date that I expect to find a t/b. We aren't in this business to be making payments on vacant properties. So here we are in early March, depending upon the specific factors I would start the lease on May 1. If something happens sooner, I've never had a homeowner become upset with an extra month's rent. If the start date is approaching and I haven't yet found a t/b, I can ask for an extension if I want to continue to try, or I can cancel the agreement.

Marius, I don't typically have documents notarized. No need to when doing a lease, or option, or assignment. A Memo of Option does require notarization, however, in which case I would meet the seller at the notary, (bank, usually), and get it done. So for me, this has never morphed into a cumbersome or time consuming part of this business.

Hello, MJ, and welcome aboard. No, your understanding is incorrect. When doing a sandwich lease, that option consideration from the t/b goes directly to you. It's nonrefundable and it's your first income stream in a sandwich, the others being cash flow and then back end profit. Option consideration may or may not be accepted as part of a tenant/buyer's down payment. It is wholly dependent upon what the t/b's chosen lender decides. In the real world, however, that is almost never the case any longer. Instead, it is treated as a credit towards the purchase price.

Are you looking to purchase the property outright, seller financing, conventional financing, a lease option of some kind, etc. Then, what are your plans on the other side? Buy and hold, flip it, etc? Some details, Mike.

Buying and selling multi families? Ambitious! Go for it, Erik! Don't be a stranger.