nsu1997

Interesting concept Jon. May I ask what signs you're using for marketing (ie what's your message and are they printed or handwritten)?

Thanks for the feedback guys. The house is located in a subdivision of similar custom homes. The few people I've shown it to were interested and even submitted applications along with the app fee; one we rejected because of piss poor credit, another decided to wait until the economy improved, another decided the rent plus utilities may be too much. In other words these people would have likely struggled to make the payments anyway. I just ran comps for the first time since I landed the deal back in the summer. Prices have fallen! I'm now priced above retail by about 10%! I realized because I'm selling on terms means I can sell it for a bit of a premium (because I'm making it easy to buy) but perhaps 10% over market is pushing it. I think the rent is reasonable, plus I'm offering $500/mo rent credit toward the purchase price. Going back to the seller to renegotiate the sales price. He may need to work the sales price down. Although I've found most lease option tenant/buyers are MUCH more concerned with the monthly payment than they are the sales price. But everything has a limit I guess. In the meantime, anyone got any other creative marketing ideas? I already blasted it out on vFlyer which automatically posts it on dozens of sites including zillow, trulia, hotpads, etc.

Got a semi-luxury house under C.A. since the summer and haven't been able to sell this thing for the life of me. $470k house, $2300/mo rent. Great custom house that shows very well. I've shown it, and had several interested parties but so far no luck. One guy's credit sucked too bad, the rest pulled out, with most of them blaming the economy and associated fears. So far I've tried handwritten "rent to own" bandit signs and the usual free internet stuff (Craigslist, Vflyer, etc). I need some creative ideas to get this house in front of the 6-figure income households here in the DC area. Any ideas?

Is it just me or are all tenant/buyers in the solar system NOT paying their rent? I have done about half a dozen CAs and over the last 6 months I got every single one of them back. Every one! Perhaps this is a reflection of the state of our economy in general, but I think what it more accurately reflects is my former lack of a good prescreening system. I fixed that problem. I'm now signed up with Citicredit and I now charge each applicant a $20 app fee to pay for a credit & evictions check. This could actually be a good thing because each seller wants me to find them a new tenant/buyer which means more assignment fees. But in all honesty I'd rather have put good tenants in the houses in the first place. Some of these people are falling behind on payments because of these bad tenants and I feel responsible for it.. One deadbeat tenant just moved out yesterday and I find out today he trashed the place. Did I mention that owner is 3 months behind because of the bad tenant? And I put him in there. Not sure what I'm gonna do about that one. Anyone else going through something similar?

Thank you for sharing these agreements. I was looking for something similar to these. Question - will you refund their deposit if a better candidate comes along with the full monty, before the first candidate's due date for the remainder of the option fee? In other words, YOU choose to put somebody else in the house after the first guy put up a deposit. He has until next Friday but someone better came along with the full option fee.

I just emailed her back with this response. Thoughts? "Sure I can request last month's rent upfront. I can just add that to the listing. Just know the more expensive we make it to move in the longer it'll take to sell. But if we don't get much response upfront we can always reduce it or eliminate it as long as it's not a sticking point for you. How does that sound?" This way I figure I can still assign it for the same amount and let the buyer and seller work out the rent between them. Just FYI the rent is $1,650 and I plan to assign it for $5k out of which I was planning to give the seller a 1-mo deposit, leaving me a net of $3,350. If I get someone to bite they'll have to pay the 1st & last month's rent directly to the seller; I'm not involved in that.

Hey speaking of deposits to sellers, I just got signed agreements from a seller who I offered to give a one month security deposit to. She just asked would it be possible for me to give first AND last month's deposit upfront. Is there a good canned response I can use for this request? Not to veer off topic too much, but I'll let you guys know what's working for me (cheaply). I too used to absolutely hate my phone blowing up constantly with worthless T/B calls. I'm sure you all know that late night infomercial for the "Magicjack" thingie? Well I got one and it works like a charm for what we're doing. First off, it gives you a local phone number (which is what you want when selling homes anyway). I use mine strictly for fielding incoming calls about houses for sale. It's only 40 bucks which includes a whole year of service. Then after that it's only 20 bucks a YEAR. Now THAT'S cost control. Best yet, when people leave messages you can set it up to automatically e-mail you a small audio file of the message. I don't even answer the phone when they call, I just checked the voice mails on my computer and call them back when I'm ready. The way I see it, if they're serious they'll leave a message or visit my website.

Thanks MichaelC

I'm with you on the $1,000 minimum. That's exactly where I was with my minimum fee. But the question is, what do I have to do to ensure I won't be accused of acting as a broker without a license?

I use a regular receipt book that I bought from Office Depot. They have carbon copies for your records underneath, and also have plenty of places to spell out exactly what the details are, even lines for you and the T/B to sign if you want.

Email from seller regarding a CA offer: "I have discussed this with my partners and we will not be moving forward with your offer. Just so you know, we do not want to put our property into your LLC and we want to deal with the tenants directly. If you have a tenant that you want to refer to us, we can give you a commission, but we want to deal personally with any and all tenants. Thank you." I can understand their concerns. Frankly if I were them I'd have similar concerns. BUT I also understand the illegality of acting as a broker without a license. My first instinct is to pass on the deal, but then I thought what the heck it's a nice house and it's priced right. I have over 300 buyers on my buyers list and most want to live where this house is located. I'd probably have it sold in one day. On top of that, they'll be responsible for the showings so it'll be a hands-off deal for me. So my 2nd instinct is to try to put her mind at ease about how common the assignments are. Then my 3rd instinct is to see if I could just tell them to sign up a new set of agreements directly between them and the seller AFTER I have assigned my agreements (rendering mine void) so at least I'll have my paper trail. Or is there is a way to draw it up directly between the buyer and seller from the beginning and still pick up a "consulting fee" or something in the middle (but still avoid running the risk of acting as an agent)? Just trying to find a way to make some change here by simply blasting an email to my buyers list. I'd hate to turn down easy money if I could help it! Thanks, Archie

Correct again! On your way to being a Slumdog Millionaire. . . So glad I read this. I've been doing it wrong all this time. I have been putting the full option fee on #6! Hope this doesn't come back to bite me. Speaking of this Michael, is the token $1 option consideration also what we put at #3 on the Option to Purchase agreement for CAs? And our full option fee only goes on the Assignment? Thanks

I'm sure most of us prospect for lease option deals by emailing or calling on FSBO ads, and I'd presume most of us use Craigslist or other FSBO sites. Does anyone utilize a follow-up system to stay in front of the sellers who are in the "motivated-but-not-yet-ready" category? Here's what I do to track and follow up with any sellers who have expressed some level of interest but have not jumped completely on board. I created a Microsoft Word file and called it "online deals searches." If I get any type of a response from a seller, I paste the entire listing advertisement into the Word file, pictures and all. Underneath each listing I maintain an activity log in red font for each individual prospect. Periodically I will go back through the prospects from top to bottom and follow-up with any and all deals that need follow-up, and update the activity log accordingly. My typical follow-up message is something along the lines of, "hey, just following up -- has the house sold?" or "have you had any offers yet?" I have always heard that most buying and selling decisions occur between the 2nd and the 7th contact with a prospect. But I'd be willing to guess that 95% of real estate investors may go two step out max, if that. The way I see it, they're missing out on the majority of their potential business by simply not following up properly.

Ronnie, You make a compelling point. That's why I tend to only follow the advice of those who I think are qualified to render it. Selling REI seminars/courses seems to be big business these days. For some of these "real estate gurus" selling courses & information marketing is their primary income stream. Not good. But on the flip side, I always continue learning and I'm willing to at least listen to whatever anyone has to say. I take most of it with a grain of salt. However, you never know when that next idea will come that will change your life. Like they say, "You don't know what you don't know." This brings up another question for the board. If you are a real estate investor who is "financially free" what exactly ARE you doing within creative real estate to make your money? Wholesaling? LOs? CAs? Owner financing? Landlording?

Good luck! Do you work? If so, at what point would you consider quitting? Just curious. Nope, no SLO and no wholesaling...retail. I'm gonna find a luxury home that is in good to excellent condition and get an option on it for less than market value. I then set up a "Round Robin" auction to attract buyers sell it for retail price or as close to it as possible to an owner occupant. I see it through to closing and pick up a check for the difference between my option price and the final sales price. For example, motivated seller has a luxury home in excellent condition with a retail value of $750K, that has been sitting on the market for 6 months. I come along and say, "I have a plan where I may sell your house for all cash with no risk to you whatsoever. No one will occupy it while I do so, and I won’t even take it off the market. If your house qualifies and we agree upon a price you have absolutely nothing to lose." We nail down an option price of $600K. I turn around and hold a 5-7 day Round Robin auction and the house is bid up to $700K. So my option is for $600 but I find a buyer for $700k. I get the difference of $100K. I would love to do this right now but a successful Round Robin requires heavy, concentrated marketing which I frankly can't afford right now. For it to be effective you really have to get the word out quickly and heavily. I figure if I get to the point of doing 2-3 CAs per month by next month I should be well-positioned to knock off one of these luxury homes by March or April.