benjyjim

You asked: Where my current tenant/buyers stand? This is a cooperative assignment--I learned this only after talking through the sandwich lease option with the seller and taking this offer to him--he wants control on who goes in there. So that was a bruise on my plan. These folks want this place badly, offered my full price (with some financing over time of the option $), but the owner didn't like the sound of them--too much undocumentable income (under the table--one guy is a roofer who makes a spread on each job when he can deliver for less than what the owners will pay) and a history including an eviction and a foreclosure. My owner wants folks who can buy his house and these folks will not be able to buy this house--probably not ever. If I were in complete control, I might go ahead and keep them, but I can understand his concerns and so I told them it's not going to work but I'll keep looking for a house for them. They're strong for the right kind deal and a properly motivated seller--and my owner may come around and see that as he makes another payment on his empty house (he transferred, has left the state, and this is a FSBO), but for now, it's a no go, so I'm going to keep looking for the right people. Thanks for the feedback! I can feel my energy level picking up...

Tony, I have ver similar aspirations and I think, given the lack of responses you've got, it's not easy to understand and few have done it. I have the mid-ohio stuff just out of reach of my desk here--I read it through once and they take a very limited view of lease purchasing--which, given that few folks understand that, may be a wise thing--and a good thing for we few, we proud (we who digress on bragodoccio). Alas, to your questions--well, I guess I wonder if maybe it was hard for folks to follow what you were trying to do in the deal you described. For me, it was--I decided to scrap it. Let me suggest the simplest scenario and we can work back to your idea from there... Let's say I have a self directed IRA with Mid-Ohio (or like company) that has several thousand dollars in cash in it and I find a deal. Here's what I've negotiated with the owner--but have not signed! **(see note below) $100k house (fair market value) Will take $80k on a 3 year option, which costs you $500. Owner needs $800/month from you. Fair rent you think can get: $1000. Option A: IRA is the only principal in the deal on your side of the table. You have Mid-Ohio sign the contract for your IRA and cut the $500 check and make $800 rent payments. Your IRA receives option money, rent money, and whatever you get at closing greather than the $80k the owner wants at the end, but paid the option consideration ($500) at the beginning and $800/month during--causing it to assume risk should you not be able to rent/sell it. (I don't know, but I'd think your IRA might also have to pay marketing fees and such). Option B: IRA does the option with the seller and you personally do the lease. Your IRA cuts a $500 check and hopes that the option gets exercised, but collects on the option money from the T/B--and you personally cannot exercise that option (that would violate 'arm's length' transaction). Not real sure, again, if this can be done or if it might require some contract tweakings... ** (I believe that this is important because I think you either do this deal as yourself or you do it "at arm's length", where you're not involved and it is your IRA, with acting custodian Mid-Ohio, who is doing the deal. You may well be able to structure the option with your IRA and the lease with you personally, but maybe not--I'm pretty sure you'll be forbidden, told or advised not to split benefits that cannot be contractually and totally split between you yourself and your IRA) I am not an attorney, not a CPA, not a financial advisor--I am a layperson who has read and thought and nothing more, but I think this is kind of the idea we're talking about. For a very simple pure option, this strategy is dynamite--your sweat equity and knowledge locks up a marketable property for $100 on an option which your IRA pays for. You flip it retail or wholesale and all money goes into your IRA tax free. Ok, you have to acquire that whole set of skills, but if you can do it or if you can spot the perfect L/O deals for your IRA, then this is quite powerful, I believe. Comments, wrinkles, further knowledge? --Ben

Ahoy colleagues. I am in what I know and recognize to be a troth of disillusionment. I am not here, however, to take the air out of the (chat) room--far from it. I'm here to recharge, regroup, and redouble. I bought someone else's course :ph34r: in January and am one month into one on one mentoring. I feel I "get" it--that I have the knowledge and skills to make my first deal. I've set up my LLC, my 800 number, run ads, found homes (two of which I locked up, one that expired and I did nothing with and one that's still in the works for 1 week) and am dangerously rife with the theoretical aspects of the business. I did get a full price offer on the home from folks who were rejected by the seller (and, pretty much by me, though I didn't want to admit it)--and assignment stood to make me $6,000 (hence, my inability to admit that these folks were not the right folks for the house). I have a demanding day job, a pregnant wife, and a 2 year old. I am near the end of my rope due to the pressure I've put on myself. I recognize that I've come a long way, learned much, and am about to strike gold any day--and that I must release some pressure from myself and continue to work my hard-won system: ads, voice mail, 'script' (not written, just my learned questions and demeanor), calling on ads, networking, signage, etc. Given all of this and nothing (in cash terms) to show for it, I'm anxious and doubts can creep in and spread like, well, mad. My most recent doubt: does our market support this business? Ok, that's an inflammatory question--and I truly do believe any market is an ok market for this business--my question is: aren't we in a difficult time for having a humming lease purchase business--low rates, recession, buyer-favored market? Sure, some people are coming around to being flexible with their home sale, and that's helpful, but there's a relative paucity of quality tenant/buyers out there, aren't there? I have found some quality folks, but I'm frankly failing at eliciting their pain and closing them well and it's my #1 focus in mentoring (not the mechanics or the strategies, but instead the sales methods, asking the right questions, making the sale with finesse and not as the result of a pure numbers game). Ok, Ok, I'm diving in too deep, still holding on too tight here. I guess I just want to hear from some experienced (more than 1 year of making deals, and more than 10 deals under the belt) folks who may have gone through the disillusionment and recall it vividly and what twist, quote, spin, technique, or attitude shift made a difference for them. And, number 2, would like to hear folks talk about the marketplace today for this business vs. 1, 2, 5, 10 years ago--as I think 1, 2, 5, 10 years ahead to how things might change for me (for the worse, for the better). Many thanks for your patience and any responses. Kind Regards,

if you really want an 800 number, I suggest you check into Angel.com. I don't know of a cheaper way. The setup takes time, but it's a really great system once you get it--esp if you are a bit computer savvy and a little bit patient. It's inexpensive too, $9.95 for a basic monthly package.

I'm in.

Update (3weeks of reading like heck and working the phones) Well, it's (practically) official: the hard part *is* finding the house--or, rather, the people willing to make a deal with you. There are clearly people out there interested in moving into the L/P's I can create. I know this from my generic ads on both sides: "RTO, nice areas, call!" vs. "Need home now, call me". (I have about 7 potential tenants and 0 houses.) So, I must keep calling the FSBOs and FRBOs. I'm setting up meetings with some realtor friends, too, to help me set up "Operation: Autopilot", which, if successful, will allow me, through a few of the right contacts, access to a qualified sub-set of properties worth calling upon--thereby leveraging my time. OK, not really auto-pilot, but more so than it is now. My questions: 1. What do I ask for from an agent? expired listings? motivated sellers? DOM > 120 days? sellers using the "RENT" word? 2. Are there any concerns the agent will have, given that they want first chance to list/sell and would much rather force that route with any potential client than give that up to me even if my offering is a better fit? (e.g. I can forsee a conflict of interest concern for the agent who sees that I could really help someone, but the client only knows about the "R.E. establishment" and not creative R.E.) 3. What should I offer in return? I'm thinking about 25% of option money for, say, the first 5 deals that go through to the end with me, then we can talk again. I want it to be a very positive relationship, but I never want to pay too much. What's fair, and what's right? 4. After traditional listing agents/buyer's brokers, who are my next targets to help me deploy "Operation: Autopilot"? I'm thinking accountants, lawyers (esp. divorce, bankruptcy...), financial planners. What do you think?

Hey, it's me again... I'm making progress, but I have a roadblock that I need to know how to get around. I'm setting aside nightly time to call on homes. What I find most often is that people "need the $ now" and I don't have the right answer for them. In my novice understanding, they get their purchase price (or whatever price I can set with them) in 1-3 years' time IF the option is exercised. How can I help them get their equity out AND do a Lease Purchase? I was thinking that it would not be too hard to re-fi, take $ out, and then do the deal with me. But, then I was thinking that, let's say they're transferring, lenders might not like the idea of them carrying a house AND buying another one. (I feel like a human decision tree--I get out there, make calls, find an objection, and need help overcoming it--if, then, else logic--but I also feel like I'm closing in on a comprehensive sales message for any seller I talk to!)

Thanks so much for the advice. I feel very warmly welcomed. I have a comment and a followup question. Comment: I, uh, got someone else's materials. Someone came to investor's club meeting and presented and one thing led to another... does this make me less eligible for help here? Question: I am drowning in data--addresses, names, needs, wants, $/month affordability, per month PITI for FS/R-BO's... What program (any freeware? shareware?) has been proven to be best and well worth it for this pursuit and then, ideally, for re-use in printing labels and doing marketing?

Just found the L/P concept and jumped in with both feet. Got an 800 viocemail number for $10/month, took out a generic ad (rto, nice areas...), and I now have 5 people wanting to talk with me. I thought the easy part would be finding houses, and the hard part finding buyers. Am I dead wrong about this? Now, I'm faced with a mountain of work for those that pass my initial call back/screening--each wants a house and I have none. Next, when I call on the FSBO ads (which I assume is the most direct, low budget way to find homes), what's the best way to get comps? I know about homeradar.com and some other like sites as well as the county auditor and domania.com. I just have a hard time getting comfy that what I've got is a "fair" comp and that I can work to create my spread from there. So, I guess I'm looking for tips on getting started & working smart and even full-on "you fool!" critiques of what I've gotten myself into already. I'm stunned at the response--is it beginner's luck or are people out there starving for L/P solutions that defy "the establishment" (i.e. realtors)?