Sold !

To simplify and answer the question directly: In a Sub 2 deal you get the deed signed over to you from the seller.....therefore, you own the home. In a LO, the seller stays on the deed and retains all benefits, thereof. As has been stated, you get control of the home.

Joeseph, First of all, your option should be for a lot less $$ than Fair Market Value. You'll do more options with Motivated sellers than with folks who have time to wait for full price. Then, you can turn around and assign the option to a buyer for an option fee, or double close with him and make the full difference between option price and your price. You can even flip for some quick cash to another investor. I don't think a full price option is going to work unless you have a buyer who just has to have THAT HOUSE AT ANY PRICE. Try to get your options at 30% under market value to make some serious money.

Negotiations is the key. If the owner is asking $160K, has he spoken with a realtor? If so, he's going to be losing 6% of the deal, anyway.....he's not going to see that $160K in reality. That's your "in" for a reduction in what he really expects to put in his pocket. Go for the price decrease and then you've built in rent credits. If that doesn't fly, then Tony's formula is right: I'd take the seller's 'net', add appreciation and then subtract my consideration. Divide what's left by 12 and there's your rent credits per month.

Along the lines of using signs for attracting TB's, what verbiage (like RENT TO OWN YOUR NEXT HOME... etc) have you found effective? Anyone?

Don't mail. Call. Get there first. Be compelling. Mailboxes are full of junk and marketing crap these days. Work with your realtor friends and tell them that, in exchange for their expireds, you'll call them all. If you find somebody you can do a deal with, you'll give them a referral fee. If you CAN'T do a deal, you'll refer them back to your realtor friend who can try for the listing. Find a couple expireds and knock on their door. Talk to them. THEN, knock on every door in their neighborhood and ask, "Are you the folks with the property for sale?" It does 2 things.....gets your business card in new people's hands and lets them see you are a real person and a nice guy. Who knows, maybe they have a property for sale and maybe they know someone who does. Make an afternoon out of it.

And, do NOT become a "desperate, motivated BUYER" !!!! Play it like you do this every day and could care LESS if they take it or not....there's another deal tomorrow.

When home owners have to divorce, file bankruptcy, fight a pending foreclosure, settle probate, file for disability and or beat criminal charges who do they turn to for professional help ? If you answered attorneys, you are right. These guys are always in the middle of the action and if you want highly profitable deals: TARGET ATTORNEYS !! I have had my investing aspirations on hold for a couple months since my Dad is visiting, fell and dislocated his shoulder. He's 83 years old, all kinds of complications set in and I have been nursing him back to health - in and out of hospitals and physical therapy, etc, etc. I was chatting at the gym a couple days ago with an attorney friend of mine and he turned me on to the idea (which SHOULD have been right in front of my face all along). Incorporate attorneys in your marketing strategy. They deal with our target market (motivated sellers) every single day. Advertise in their newsletters or do a direct mail campaign....maybe even speak at their office or in front of a luncheon group. This will be my focus when I kick the investment machine back into gear when Dad is better and can fully function again. Thought I'd share.....

So, can you share with us what those free techniques are? Inquring minds want to know.... Thanks !

A motivated seller is a motivated seller. A guy who bought a 4 million dollar mansion (that is now a 5 million dollar mansion) and then got booted from his CEO job at some major corporation is now a motivated seller. Offer to "stop his bleeding" and you'll have a deal. Can you see yourself giving the guy $100.00 bucks for a 4 million dollar option on a 5 million dollar home? Offering a buyer $500K instant equity for $50 grand, maybe? Or LP-ing the thing? Serious bucks coming your way, either way you slice this. A guy who inherited a $250K house he doesn't want? This happens all the time and you have a motivated seller. Make him an offer or 2 to help him out. Divorce, Transfer, Job Loss......they happen every day. In this business, like any business, you need inventory or you shut down. Houses are our inventory. Go find them and then find a way to dig up the right buyers. Ask everybody who is selling something HOW you can help them and let them answer you. They'll tell you how they can be sold. If it works for you and you can create a way to help them, DO IT ! The price of the home doesn't matter. There's a buyer for it somewhere.

Does anybody have any really effective copy for post cards that they might be mailing to expired listings or MLS lists in general? Thanks

If you have a desperate seller with a $600K home, I would dive in there and see how desperate they were ! Presidents of large corporations and business tycoons do go "belly up", too, you know...........especially after 9-11-2001 and still today. Never try to guess anyone's situation. Then, I'd offer them a 90 day option to buy it for $420K. If they are really desperate, they might take you up on it. If nothing else, it's a starting point for your negotiations. You could sell that home fairly easily for $500K with the $100K "instant equity" incentive and pocket a quick $82K for yourself. Or just sell the option for some big chunk of change and offer even more "instant equity !" As Michael said.......make offers !

Alan, Of course it does. And, you're right....if you don't have ability to acquire homes, your business is not a business. No inventory can only mean no sales. Buyers will go elsewhere. They need homes and if you've got them, they may buy from you. If you don't have homes, they will absolutley, positively 100% NOT buy from you. My focus is marketing for both at the same time, though. Your mileage may vary.

2 words............. BUY THIS: Click Me You have come to the right place. Some people here routinely offer 120 - 130% of the Fair Market Value. Hold on.....you are in for a wild ride !

Trust me when I say this, Krusty, I am not the voice of gospel here, as I have just begun my REI imvestment career with CA's and LO's here, too. But, I have had the same trepidations and have done the same kind of over-thinking. I am undaunted by it all and moving forward when time permits.....I try to get in an hour of calls and marketing every day. Here's what I know: if it scares them off - they are not motivated to begin with and I let them go. I might follow up with a reminder note or a postcard or a brochure with my business card if my gut tells me not to shake him out forever. But, I don't need their negativity bringing me down. I move onto the next call. The majority of people you speak to are going to be the same - unmotivated and wanting cash, sweet cash every time. I do know the motivated ones are out there and I only need to find a couple a month to achieve my goals. OK, there's one game plan, sure. Personally, I'd rather blow through a stack of "NO's" and save my money on postage and follow ups to dead leads. A phone conversation gets you good at talking to sellers and finding out that there are not that many objections to what you have to offer. The same group of objections come up all the time. Post cards to a list of expired MLS listings might warm up a call, yes. Be sure to follow up the mailings with a phone call. The postcard isn't going to do any good for you unless you hit them soon thereafter with something else. It generally takes 7 contacts to stir interest and have your offer and company register in their heads. Websites can do 2 things.....sell or capture info. Don't try to accomplish both with your website. In this niche, I'm thinking the website would better serve you if you used it to tease and then capture information for a follow up phone call. Hey, this is a people business. My thoughts are that if you can't talk to people, you can't succeed in this business. We all need to not rely so heavily on automation and start relying on getting leads and then following up aggressively when somebody raises their hand and says they are interested. For what it's worth, there's my 2 cents

I did a search on the boards here for Expired Listings (as I am about to strike a deal with my friendly neighborhood realtor). Everybody is talking about sending letters and postcards here. Doesn't anybody CALL these expireds or soon-to-be-expireds? This is a Gold-mine in my n00bie opinion and should be jumped on. You might find one ripe for the picking NOW !! If not now, then start your postcard campaign, or send him to your realtor to list the property again. The realtor will love you and your source will never dry up. But, why all the letters first?

Brian, The fast answer is for you to get your best price from the seller and write the option under market value. If you can get it for a $10K discount and sell the option paper to the buyer for $5K, everyone wins. The key is to get the best, best, BEST price from the seller with enough spread to make it attractive to the end buyer (still under market) and to put a profit in your pocket.

Brian, No Free Lunch ! If you don't want to do the CA peperwork, tell the guy you'll consult with him, provide the proper paperwork, etc for a couple grand. Fill out a consulting agreement, collect your money and show the guy how to do it, a la MC's manual !

Ahhhhh, yes........the Rice Brothers ! John and Greg. Local yoakles here in West Palm Beach. They made a fortune in real estate and are now the pest control moguls........they own Huelett, a huge past company. In fact, they dress up as bugs a lot and do their TV commercials. 25 years ago when I first came to FLA, I'd bump into them in the bars and clubs. They were hitting on and scoring with women left and right and there I am wondering how these "dwarfs" (really) did it. Smells like money to me ! You'll learn a lot from these guys. They also offer this training: LOL

Gotta have some sort of a hook or a groove in the little pole to put the sign into on the way up. Then, the top of the little pole can have a groove in it to rest the nail before whacking it with your giant hammer???

Check this out: Click Here Do you think it's possible to make one from supplies at Home Depot? What would you need? Makes sense. Do you like it?

We should be careful in believeing unequivocably that this is 100% true. It can be argued that any option consideration paid to us does have a cash value because it came out of the TB's pocket, whether it's $2K or $15K. If they wanted to push the issue, even though we have stated clearly several times that Option Consideration and rent credits go toward the purchase price, couldn't they build an argument that they have the OC amount invested in the property? It's different from rent credits and lenders might even allow that payment to count as down payment money, right?

How are you working the deal? Buying and selling outright (flipping)? SLO? CA? Double escrow? What? How? Gotta love it !

....and from the city-data.com site I grabbed this tid-bit: "Median house value: $98,000 (year 2000)" In 2004, that number is $334,000 !! Yikes...........

Monster, Good advice from MC. Also, if you're willing to accept 2% back from the realtor, why would you make that offer to her? Offer 1% and let her win the round by "talking you up" to 2%. ya never know, she might accept 1% and you just made some good jingle without doing a thing ! Cheers,

Pete, NICE GOING !!! How did you find it?