grannyguru

Now THAT is a good idea. I'm throwing away lead after lead after lead that would make for a perfectly good listing. I've tried the route of signing up marginal cash deals and found selling the property too difficult. But... referring that out to a realtor could work. I know there are agents out there who work solely on a referral basis, their marketing brings in leads which they refer out to other agents to work, and they get 25% of the commission when the deal closes. Since a broker can't pay me a referral fee without violating his license, how would I get paid? Release fee on an option perhaps? REPLY: When agents pay non-agents that 25% for having referred the lead, it's called a "marketing fee" instead of a referral fee. Just a simple change of terms makes it legal. Hope that helps.

Per square foot neighborhood comps past 6 months show market value 309,000 w/ all comps 300k plus Sale price: 275000 Lovely established but newer neighborhood in Sierra Vista. Moving out of area. Want to move 1st of year. Wants sale, but may consider lease-option or subject to with right investor managing or buying property. Needs 30k cash at least. Total loans 223k No repairs needed; move-in condition, except no lawn in back yard. 3 bedroom with huge family room/office which could be 2 bedrooms or large bedroom and family room.

Just shows ya: I'm pretty scary! Glad to hear you are still with us! Off to call FRBO and FSBO.... in Canada and elsewhere. Got one here to call again this afternoon. Alice

Hi Rachel: Where is the condo? If there's anyone on this forum near you, they can probably help, though we'd need more info on the condo. Alice

Tell Jeanne: Hurricanes don't work in your area!!!!!! Tell her: violate that rule, and she'll hafta face me! da mudderlaw

Answer: NO! ................................................................................ ....................................... Your scenario would ONLY apply if the seller had just recently purchased the home, claiming to be going to occupy it. These things are spelled out in the contracts the seller signed when taking out his loan on the property. IF someone takes out a loan as owner-occupant and then almost right away turns around and rents the place out, then the seller could have problems. IF the seller lied about planning to occupy the property, then the seller is guilty of loan fraud. But again: these things are made clear in the loan contracts. Translation: it is NOT a big, scary thing with sharks out there ready to attack at the least slip. It's quite common for people to buy a home and then later decide to move somewhere else and rent out the old home. Lenders don't care as long as they are paid and the seller hasn't committed loan fraud. If the loan specified the home could NEVER be rented out, then the seller would simply have to refinance. But I doubt you will ever run into that situation and the seller would definitely be aware of it long ago. Hope that helps, Alice

Lord, I LOVE THIS FORUM! There is NOTHING like it anywhere! Alice

Hmmmm I wonder if this guy is related to Mr. Jerk? I agree: tell him to take a flying leap. I'm tired of pin-headed two year olds being rewarded for throwing tantrums! First of all: Michael's right; he'll lose in court. But at this point think: You have got not only yourself but as you mentioned several people mining for deals.... he won't win... but even if he did, SO WHAT!? In the meantime, you are going to be adding so much moola to de pocket that his idiotic ravings won't matter, nor would it matter if he won, which he can't. Contract law... and especially real estate law... says he's done before he starts. (I am not a lawyer; I only play one in street theater! ) In the unlikely case that happened, it would be a pleasure for me to keep on calling to make up the difference to you! Ya got all of us here, kid! Alice

I agree; I despise insurance companies, credit score keepers, and banks, to name just a few. My insurance clients liked me so much because I educated them, I cared about them, I was good to them. Unfortunately that made it difficult for me to get them to understand that the Company was ONLY their friend when someone was suing them. When it's the Company having to pay them, it is the job of the Company adjuster to be careful not to pay them a penny more than required. Tony will understand this It's called being Thrifty with the Stockholder's money. Here's what credit has to do with risk: I am a great driver; a wonderful risk.... even though I am now temporarily extremely poor. But I have been rich and I have been poor, and I can tell you: rich is a heck of a lot easier and more fun! But being poor, I haven't been able to take care of things, though haven't gotten way behind on most bills. Went out almost on the street rather than get behind in rent. Am frequently upset; am jittery because I am so vulnerable. For me, car trouble in an hour away means I lose the car, where when I had money and great credit, all car trouble meant was a brief inconvenience while someone else towed and repaired the car, after having someone bring me a rental. So when the car hiccups, I freak out, and that's distracting. Those times when it looks like bad things are really going to happen, I'm upset, and that's distracting. Having bad credit, if you are not a jerk and it just happened to you, still means you cannot paint, repair, etc. as you might want to. Places fall apart, not because you are a jerk, but because you are poor. I cut my grass with a push mower and a pair of scissors, but it still looked like hell because it wasn't really grass, but short weeds. Having bad credit may not always mean you are poor. Certainly it does not always mean you are some sort of a jerk. (After all, here I am a saint!) But when it does not mean you are a jerk, it means at least something bad succeeded in incapacitating you. Happened once, may happen again. Translation: you might not be able to meet the needs. Plus, as mentioned above, may mean you are understandably stressed and possibly suddenly vulnerable, and might freak out. Risk does not mean these things WILL happen; it means over a large group of people with those factors, it WILL probably happen to a certain percentage of them. When the same people, in stable situations, could be relied upon. ie. not be risks. ............................. Since I'm saying this, it's important to note for those here working and so much wanting to become un-poor...or at least to leave the slave trade.... that being poor, having bad credit, etc. DOES NOT MEAN you cannot become rich. Just as my having been well-off did not mean I could not become poor... I'm the same person, either way, but I sure don't look like it to banks. Plus it's true I'm a heck of a lot more nervous when poor! I'm letting you know I'm poor so you will know I'm not some privileged person looking down on those with "bad credit"... or supporting banks, credit agencies, or insurance companies. I hope they lose in court. In fact, my situation here is the only reason I haven't invited Michael here. He goes out of his way to be supportive, and deserves the best. Shortly we will be able to laugh about it all, and THEN I'll invite him here. Although I really AM privileged to have Michael and all you folks on the forum here. This IS the forum where even us 'por folk' can actually get rich doing real estate! Hope this helps. Alice

The answer to your question is that where it comes from depends upon how YOU set it up. Or: what all parties agree to do. How YOU look at it is important because that's going to influence how the seller and the buyer look at it. ................................................................................ .................................... But let's suppose you do a L/O where you are buying the house from the seller for 200k, and selling it to the T/B for 206k. Let's suppose you collect 6k from the T/B as option consideration, bringing the selling price down to 200k, and the lease runs for a year. Let's further suppose you are giving a 50% rent credit on $1000/month rent, or $500/month in rent credits. $6000 for the year the place is leased. If you are doing a L/O probably the price the seller is getting is above what he would have otherwise gotten. Otherwise he wouldn't be doing the deal with you. Supppose the seller complains what you seem to think: that he is losing $500/month from his equity. You tell him: HE ISN'T LOSING EQUITY! Instead, he's RECEIVING part of his equity early.... Not only that, but he is receiving that equity payment WHETHER OR NOT the tenant ever buys. Cash in pocket. His to play with. No matter what else happens. And that is only part of what makes our L/O so lucrative for him! So: if the tenant exercises the option, the seller then gets THE REST of his equity. If the tenant doesn't exercise the option, then the seller GETS TO KEEP the part of his equity he got early. And if he wants, to then raise the selling price and the rent and start getting paid MORE equity early. Even better, in the meantime, his getting paid part of the equity early in the form of a rent credit KEEPS THE T/B paying on time, etc! Win win win win. ................................................................................ .................................... Now, of course you can also set it up so that, even after the rent credits are paid, the amount owed by the T/B if he exercises the option, is AT LEAST $200k in our example. I have software that calculates that. So in that case, you'd be selling the place to the T/B for $212k. You would collect 6k as option payment, and the rent credits would reduce the remaining price from 206K to 200k. Otherwise known as what you agreed to pay the seller. Now the seller is not only getting his price, but whatever extra the T/B pays him in rent, including rent credits. ................................................................................ ................................... If you still have problems with this, adjust YOUR deal to fit. As long as the deal fits the needs of the T/B and the seller and you, and that means the house will appraise at point of sale for enough to cover the loan company's needs. Another, more important point: Without going to all that trouble, people here, especially Michael.... have been doing L/O with rent credits etc. for years, with all parties very very happy with the deal. I know: it's difficult at first. You want to understand and you keep coming up with objections. Trust me; this works! Most sellers and T/B out there are not going to come up with all the objections you can come up with when you are starting; they are just supremely happy to have the property sold, purchased, or whatever! On those occasions you come up with someone that negative, AGREE with him and dump him: move on to the next deal; why share your good news with a jerk? It not only works; it is a win win win win win deal all the way around! Alice

Many years ago I was an insurance agent. Checking credit is something that has been done by many companies for different products they offer. It began with life insurance. You are right that it's been spreading even into the rates on auto insurance. (Kick 'em while they're down!)... :ph34r: but the real reason is credit problems are a risk factor: people with problems are less able to take care of things and more likely to be exposed to risks. With downsizing etc. it may become a less useful indication of risk, purely because the majority will be effected. As a person who has been in both places, though, I'm glad to see someone challenge it, even if it is a real risk factor, because I don't like the way credit report companies operate. Alice

Once again: CONGRATULATIONS!!!!! Now, off to spend all that lovely cash! Enjoy! (Looks like I'll have to make a copy of this post, so I don't have to keep typing it everytime you close a deal! ) Alice

WOW!!!! Great Work! Congratulations!!! You are an inspiration! Alice

OK... I think what you do with Craig's list is to post to the nearest geographical area. I notice a Tucson house for sale posted in the Phoenix category because there is no Tucson category. Their site says their small staff adds unserved communities as they can get to them, but they also say they add new ad categories as they notice ads for them. The example given is that if they notice many furniture ads in the "for sale" category, they will add a "furniture" category. Perhaps they will do that for area categories too. I'm going to see if I can post to Craig's list for my area, using Phoenix. Hope that helps. I've thought of programming a database to create it's own categories and locations. That way, people could post what is needed, and the database would sort it for them and present it by area, etc. But at this time my priority has to be getting deals. For one thing, I'd have to be able to afford the possible website traffic in case it happened before it gave me a deal in area. Alice

Dang! ...So THAT's what's wrong! I've been trying to do false estate! Alice

Thanks Mr B! Your info helped me find one more FSBO near me! I've emailed the owner. Alice

Yes; what have you done with Doug? Michael; I thought we were going to be on our own this weekend! Doug, I'd be interested in calling some leads. So far today I have the one I already called here. Later; congratulations!!!! Alice

The money you are paid by the T/B DOES NOT come out of the seller's pocket because it is NOT money the seller would have had. Instead, the seller is getting money ADDED TO HIS POCKET because you set up the deal. Think of it this way: If you bought the house from the seller for 95k and then sold it to your buyer for 100k, would your profit be coming out of the seller's pocket? Of course not. It's the same thing here. If you start thinking your profits are coming out of the seller's pocket you may feel you owe him. Or he may decide to think that, and you go along with it! The seller is selling the house for as much- or probably more- than he would have sold it for without you in the deal. He is not losing money; he's gaining money. You are SAVING people money by selling the deal instead of buying and then reselling the house. If you had to buy it and then resell it, you would have to buy it for less and sell it for more, because of the added closing costs of two sales. The option money does work as part of the down payment. It is YOUR MONEY. From what YOU were going to sell the house for to YOUR BUYER (T/:P. When you assign the deal back to the seller in a CA, you are assigning him the part of the deal that is left... with your option payment having been already removed from the deal (paid to you!). The fact that the option payment acts as a partial downpayment only means the seller is getting a done deal where that part has already been paid out to someone (you). He gets what is left, which is more than he would have otherwise gotten. It does not cost him to deal with you; it pays him to deal with you. The money that goes into your pocket is money that would NEVER have gone into his pocket. After all: remember, he's the guy who couldn't sell it to anyone else for what he was asking...that's WHY he's turning to you! Alice

Doug: CONGRATULATIONS!!!!! Alice

CONGRATULATIONS!!!! I KNEW it would happen!!! Thanks also for all your help; you are a real inspiration! Alice

Tony is right. This kind of thing has been done for years in commercial real estate. You can read about it in many real estate books and get lots of great ideas as to how to fill the vacancies, etc. Contingent deals.... If you want to own it (why?) get agreement from a lender to give you interim financing CONTINGENT upon your getting final financing...if the deal is big enough, from a big traditional more conservative lender, like insurance companies. Then go to an interim financing type, and tell them you have final financing, awaiting only interim financing. You may end up with an agreement that says when you get main tenant and interim financing, then you get final financing. You can use this to tell prospective tenants you already have financing, awaiting only your main tenant. Etc. The books are filled with these deals. Hope that helps. Alice

California: above San Francisco: Marin county motivated seller: Has purchased 650k home but deal on seller's old home for approx 450k fell through. Seller has 650k short term loan on new home which was supposed to only be needed for 2 months while old home closed. If interested, send your contact info to me and I will have it forwarded to seller. Alice

WOW! Wonderful! I'm so happy for you, Doug! With all your already-existing success in re investing, this should work great for you from now on! Couldn't happen to a nicer, more helpful guy! Go for it! Alic

Good luck Mike! Alice

I wonder why they ask it. Why would you be renting and selling it if you didn't own it? "I'm an investor; I buy properties to rent out and/or resell. This is one of them; isn't it a nice!?" I can see more than one response, the best one being "Do I own it? I'm curious: why would you ask such a question?" If you are somehow afraid to give that response, then: "Do I own it? ...do you want it?" "How can I sell it without owning it?" "Of course I have an interest in the property.... that's WHY I can sell it!" "I don't understand...what do you mean?" Even better: "Would you want it more if I didn't own it?" I think worries over a stupid question asked by some tire-kicker result from some leftover fear that what you are doing is somehow "wrong". I see new people come on this forum and wonder if it is "legal" ...."right'... etc. They can't believe they would deserve equity or cash in return for what they are offering, because they are new. Also because people in this country are left totally ignorant about the most important investment most people make: real estate in the form of their home. That's why, when it comes time to do it as a business, most of us are at first so unsure of "if it's okay!" :ph34r: Alice