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<Steve> Point taken. Sorry I couldn't keep my mouth shut when I read your original post. Had I been patient and read your other posts, I would not have questioned your character like I did. Good day, Pat

<Steve> I did read that on in later posts that you did the right thing, by trying to buy the property from the original seller. And I commend you for that because, truth be told, I have made mistakes as well, and some I continue to pay for. But I think just backing out and hiding, or waiting for the seller to make his move or telling him to go ahead and sue me, trying to call his bluff, is the wrong thing to do. My parting comment is this: RE Investing is hard enough to do, without someone out there calling themselves an investor ruining it for everyone else. Again, I commend you for stepping up and doing the right thing. And have no doubt that I have plenty of experience, by making plenty of my own mistakes, and I did not take this as personal. It's a moral ethics issue. We needn't be grouped as a bunch of scammers, we are investors that create win-win situations for all parties involved, and we make a profit by creating solutions, not creating problems. Good luck, Pat

Personally Steve, I beleive that you reneigged on your side of the deal, and deserve what you get. I'm an investor that does lease options, though none are sandwich L/O's. And this very example that you give is the reason why. It makes it very hard for those of us that live up to our end of the bargain to operate when there are people like you out there that give the rest of us a bad name. Sorry to be blunt, but you backed out of a contract with the seller, and left his place in worse shape than it was when you bought it. You deserve to get bit. Good luck, Pat

Jason, My only thought here, is trying to tie up your option to buy longer than the 90 days, more like a 2-3 year term, which will give you ample time to get your tenant buyer financed. What if you cannot sell it within 90 days? Do you plan on getting conventional financing yourself, then lease/optioning it? Don't get me wrong, it sounds like you got a decent deal on your hands. I'm just concerned that 90 days is a relatively short period of time to find a buyer and get their financing in place. Good luck, Pat

Option8, That's a great story indeed. Thanks for the motivation. How did the client even know that you were going to be there? I thought you said that you had an appointment that stood you up? Pat

Sometimes I am faced with tenant that cannot come up with the option deposit and 1st months rent. I tell them that this is company policy that if I don't have the option deposit and the first months rent, then they cannot have the keys to move in. Simple and it usually works to get them motivated to get me the full amount. Too many times, they will give you excuses about why they cannot make up the amount after they are already in your house. Still I am faced with folks that can't quite make the grade. I will make an exception similar to the following. Say I'm looking for $5000 Option Consideration and $1000/mo rent. And they can only come up with $5000 and want to move in right away. In this case, I will let them know that I will consider $4000 the option deposit, but since they were only able to come up with $4000, the monthly payment will be slightly higher, say $1150, instead of $1000. So then I ask them if they have an additional $150 and I can give them the keys? This usually works fine for me, and I make an additional $150 in cash flow monthly. There's always more than one way to skin a cat. Good luck, Pat

Wes, Good question. Answer is that it varies from lender to lender whether he will qualify for another mortgage or not. But here's what mine says. If I have a mortgage on a property and an active lease on that property, they will count 75% of that lease figure as additional income. So here's a practical example: I have a lease on 123 Anystreet, USA, that gives me $750/month. Using the bank's 75% guideline (75% times $750/mo = $562.50). Let's also assume that my mortgage payment on this property is $500/mo. In this case, the mortgage is completely "washed" (bank term) and also gives me additional income monthly in the amount of $62.50. So typically my bank would not have a problem loaning me additional money as long as my income can support it and I don't go over their debt-income ratio on the new loan. Good luck, Pat

I beleive in the Performance Mortgage method as well. This puts you in a position, albeit either 2nd or 3rd behind exisiting mortgages to collect your money at closing time. You don't even have to do a double-closing in this scenario. You can simply assign your position to your tenant/buyer. They sit down at the closing table with the original seller. The title company will call you before closing to find out what the total payoff is on the PM. The deal gets closed, and the title company sends you your payoff in a cashiers bank check! Good luck, Pat

I would have to agree with Michael on this one too. If you were planning on holding them for a while and raising rents when the current leases expire then that's one exit strategy. Or Lease/Option them once leases expire, that's a second option. But with the deals being tight, I think that the exit strategy that you desire (selling quickly for a profit) may be a bit difficult to pull off. Especially if you plan to enlist the help of a Realtor to sell it for you. The commission fee's would eat up any potential profits that you might be able to hope for. Buying right is the key to this business. Pat

I heard an answer to this topic the other day on mrlandlord.com. Maybe not for bandit signs, but for yard signs stating For Sale or For Rent. This guy kept getting his signs stolen or tampered with. His Solution to this delimma, was to coat the steel sides of the sign with petroleum jelly! I'm not sure how he came up with the idea, but I guess if I was in the sign stealing business, and came across one that was going to get me all greasy vs. one that was relatively clean, I'd go for the clean one 9 times out of 10. LOL! Have a good day all, Pat

I agree with Michael, that the T/B'r will usually tell me what he has to offer as option consideration up front. Sometimes they are stubborn, and you have to show them your hand. When they do, I usually tell them that rent price advertised is based upon the 5% down figure. So that they at least know a ballpark figure. Many times I will concede to a lower option payment. At which time, just like in car financing or anything else, lower down payment = higher monthly payments. So at that time I will get better cashflow on a monthly basis. Good luck, Pat

Mike, Just used your form to submit my listing. I like the web page service it's pretty easy to navigate. How much traffic do you receive? Does your postings go downstream anywhere? I use a FSBO service called allthelistings.com right now, and their listings get published in Yahoo Real Estate, which really gives them a lot of visibility. Pat

Tony, I couldn't agree more. And the way you are thinking about changing your strategy is the way that I do this business today. Good luck, Pat PS - Why didn't you vote?

Exactly, I don't do many sandwich lease/options. I usually buy and lease/option the property. So it doesn't really bother me that much when someone doesn't convert. I just mark the price to current value and collect another option deposit and start over. But I would think with my track record, that if I was doing sandwich options I would be as nervous as a hen in a fox house. Interested in seeing others replies, and those that have high conversion rates, I would like to know what they attribute that success to. Whether it's a relationship with a good mortgage broker, or credit repair service or how they handle escrow, etc. Hopefully you'll get some good data. Pat

Just curious about everyone elses conversion success rate within the term of the original lease/option agreement.