fanelli19

I am sorry to dig up an old thread here but I have some questions regarding steps 1, 2, and 3 above on the CA method described above: Step 1.) do you spell out the exact terms and price in the option to purchase? Step 2.) do you sign up the lease and the option to purchase agreement with the buyer/lessee with YOUR NAME as the seller/lessor? (if so, I do not understand what permits you to enter into an agreement as a seller/lessor for a property that you do not even own. Is the option to purchase in Step 1 some special agreement that allows this or is it just your standard option to purchase agreement?) Step 3.) so the seller is the assignee, but you still collect the option consideration from the buyer? (I've never heard of an assignment fee being paid to the assignor by someone else other than the assignee?).

Excellent advice, thank you Chris and MC. I have a seller now who is open to doing a lease option. He bought a new house, and is getting married. He has some finishing touches to make on the house now, and house will be ready by the end of next month. I'm going to get some figures from him and find out a little more about his situation. I approached him though as if I were the tenant buyer. So he is asking me questions about when I would need to move, etc. What is the best way to move forward without scaring him off? (Assuming I look at it as either a SLO or a CA).

Okay, I found the document, and I found my manual. Thank you very much MC for your help. Time to study.

Hello, I was wondering if anybody has a sample script that they use when emailing to sellers on Craigs List for a Sandwich Lease Option? I am familiar with the CA script, but do not recall seeing the SLO script in the course or on this forum. It has been a while since I reviewed the manual. I'm trying to get back up and running and this time I want to look for the SLO first or Straight Option before pitching the CA. I have a seller that responded to the first email, and I'm looking for a good response. Before I was only pitching CA. Thanks all!

Yes I understand that every lender is different and it is very difficult to find a lender/underwriter/broker that knows what he/she is talking about. So this is why I was mainly referring to Pilot's reference to FHA lending guidelines. Pilot, is there a specific bank/mortgage company that is allowing a t/b's option money on a CA to be counted towards the FHA's 3.5% down and also allowing rent credits to be used as seller concessions? If this is true then I believe the FHA programs have the same guidelines no matter what lender you use so therefore it would work on any FHA purchase and would really help us talk up the selling points of a CA.

I have a CA going on right now and the hubby works but the wife is a stay at home mom and also a nursing student. Would you still take a lease application from the wife even though she will not be the one getting a mortgage in the future to purchase the home ?

Do lenders really treat the assignment fee as earnest money if it went into the pocket of the CA investor and not to the seller directly? If this is true then this truly is an awesome way to get a deal cashed out for your sellers.

What is the expiration date (#9) on the Short offer Form used for? Is this a time limit that you impose upon the seller to sign the deal and get it back to you? Or is this feature used to allow you enough time to find a T/B to assign the deal to in a CA?

Yeah, this guy is an experienced rehabber/landlord. My website actually is targeted for sellers and not necessarily landlords. So what I can tell him is that I only allow sellers that flexible option and not really landlords. In the meantime, I will change my website. If he turns me down then I will just continue searching for a motivated person to work with.

Is there a way to amend MC's documents to allow the seller to continue to market the property to find their own tenant buyers or tenants while I am working with them as well? I have a deal in the works and the seller/landlord read thru my website. When I created the website I mentioned the fact that I would allow a flexible arrangement with the seller. After having some experience I would prefer not to do this. I guess be careful what you wish for and I am now learning why MC does not do flexible arrangements. However, I would like to know how I can best make MC's documents flexible incase I decide to do business with this person. Any ideas? Thank you guys/gals!!

My theory with this is (and I'm not being harsh towards MC's comments but I've given this some thought) There would be a cost savings benefit to any propery management company if they wouldn't have to answer every single tenant phone call, answer the same questions over and over, and run all over town and show vacant properties to "tire kickers". Eventually a good tenant will come along but how much of their valuable time gets wasted by going to several "no show" appointments every week? Their goal should be to go out there and find new clients. And their new clients are landlords not tenants. And besides, they can save a lot of money on fuel and potential labor costs. Companies are outsourcing everything these days. Why wouldn't they outsource this very mundane task? I do all of the work and then send the one tenant that likes the place to their office for an application. I may have showed the house to 8 people and spoke with 20. But the most interested tenant is handed to them without them lifting a finger. By me doing the "dirty work" they can now focus on growing their clients and their business. Thanks in advance to all who provide their input.

During my craigslist marketing techniques, I met up with an older friend who runs a property management/renovation business. I told him what I was doing with CA's and also mentioned how I would also do a CA with a rent only seller. Anyway he knows that I am unemployed and looking for ideas so he said that he would be looking for someone to set up appointments and show vacant rental units to tenants. He would do all of the background screenings and evaluate any interested tenants. I would just have to take the calls and set up the showings. I negotiated 1/2 of the first month's rent as my fee. Now this might not seem like a lot but I wanted to approach other property mgt co's and real estate co's with this same service. It may fill in the time while I'm pounding the pavement for CA's and also earn some bread for my time. What is the best way to make sure that I am paid from the deal? I thought about entering into a lease agreement with each house with either the owner or the prop mgt company and then assigning the lease over to the winning tenant, but I don't know how much control I would have on something like this. I don't want to approach new clients with a confusing approach to my services, but at the same time what could be done to make sure that they compensate me after I have shown the winning tenant the property?

Sweet!! Thanks MC...it was your answer in a previous post that I found!

Nevermind, I found my answer in a previous post. It is net price to seller on the short offer form that goes on the option price.

When you are meeting with a seller and want to use a short offer form for a CA, what are you putting in as the option price? Is it the net price to them? Or is it the full price that includes the added on dollar figures for the expected option consideration and rent credits? That part confuses me. Thanks.

Yeah, they're simply small, 12 X 18 or 6 X 18, "Rent to Own" signs with arrows.I use a yellow and black lettering/background, as they're the easiest to be seen. I have them custom made at my local print/sign shop. I have been using Witness Designs sign company. They have pre-made Rent-To-Own signs and directional signs and they deliver right to your door. There is a thread pinned here on the marketing forum. Or Click Here Steve, thanks, this is exactly what I was looking for. Thank you also Jason.

Jason, when you say directionals, what does this mean? I 've seen the for sale by owner arrow signs but have never seen a rent to own directional (arrow sign). Thanks

fanelli19, Out of curiosity, who or what program is using that contract. Feel free to message me off the board if you would like. Thanks, TAT TAT and Lynn FL, I sent you both a message off the board

I think what this guy does is screens his calls to see what buyers have what to put down. This way he is not changing the price around due to one buyer having 3K but another having 8K, etc...So lets just say he finds a buyer that has $5K to put down and the guy is approved. He then turns around and draws up the lease option agreement with the t/b at $150,000.00 and collects the option money as his fee. He then assigns the deal to the seller who then has a t/b who owes 145K (giving the seller exactly what he wanted). This way, you are not doing any upfront explaining to the seller on how you get paid and marking up his asking price/market value for you to earn your fee. I think that this method would be a lot easier to do, especially in your up front negotiations on price with the seller. You would end up doing exactly as you promised, you gave the seller a buyer at 145K and the buyer paid you for this. Otherwise, signing this up with the seller at 150K and then getting a buyer who only owes 145K because you took the money seems like it would confuse the seller and cause him to look elsewhere or realize that you are no different that a realtor who is taking money out of the sale. That is my opinion at the moment and in my brain it would work better; but until I do a deal, I may be wrong.

I've seen someone that does the CA a little bit different when it comes to the paperwork: He gets a flex option contract that states that he has the option to buy on a lease purchase. It is a simple one page document. This document says that when he exercises his option to purchase he is going to enter into a contract with a T/B and then assign this contract over to the original seller. This seems easier to do because then you do not have to explain how you are going to mark up the purchase price of the seller's home in order to be compensated from the down payment. For example: seller wants 145K for the home and you do your comps and come up with 145K as the market value. You explain what you do to seller and give him the simple flex option contract for 145K. Find a t/b who has $5K down. You enter into a lease option agreement and rental agreement with T/B and collect $5K for downpayment. You collect 1st months rent, give to seller along with the paperwork and you're gone!! What do you think of this way of doing the CA? Is it easier or is it asking for trouble?

I came accross a site called webs.com. Apparently you can set up a free website or as many as you like. I think the catch is that you have to allow ads to appear without having any say so. If you pay them a fee, you can have a site without ads. Anyway, I just thought I would share that with anyone who wanted to check it out or if anybody had any comments about it. Hopefully it is a big help for someone. I'm going to check it out further here shortly. Thanks.

Real Stats is a website serving my specific area. They are kind of like an online comparables site such as Zillow; however they break the data down into categories such as sales by census tract, county, township, etc...This is very specific data to my market. They have provided data for the Pittsburgh newspapers to report stories on real estate statistics but local realtors, appraisers, investors, etc...can subscribe to them to get information. It seems like a really cool service that you can trust and use to really nail down values. Regarding the rent, if I reduce it to $1,000.00 then, do you still think that I'd have a sound strategy here?

MC, I did receive your email and I just sent you one back per your instructions. Thanks again for your help!!

I thought that there was a Lease Purchase Advantage Flyer that came with the course? I saw that MC sends this flyer in an email to his sellers once they express their interest after receiving his first basic email. Does anybody have a copy of the Lease Purchase Advantage Flyer or should I just create one of my own? If created on my own, should I do a basic Microsoft Word document or do you use some marketing software to make a really good looking one? Thanks everyone for their help!!

Michael, A wholesaler friend of mine who is also a realtor uses a private software called "real stats". He says that the real estate data found in newspapers (what are those??) contains data from real stats. Anyway this friend of mine says that the value of this home is $115,000.00. I found out that the seller is not crazily motivated as he normally buys real cheap in real good areas, does a lot of the work himself and then rents the properties out for long term cash flow and appreciation. On this particular property, however, he really likes the idea of a rent to own for some reason. And he likes my demeanor and my idea and wants to make sure that I am compensated well for offering him this solution (true story!!). He has a few other properties as well but they are all tenant occupied at the moment. He is an older man and says that selling properties wears him down so I think he likes my enthusiasm. He bought this house for $75K and put $20K into it. He still wants to put a new roof on and do some landscaping. He thinks it would rent for $975/month. He does like the idea of the rent credit and I told him that I could probably get $1175/month if he credits $200.00/month toward the purchase price if paid on time. My friend who did the market value analysis said that home would rent for $1000.00/mo to $1400.00/mo depending on size, etc. This is only about a 900 sq ft home but has all new mechanics and some upgrades. He dumped a bunch of dirt in the backyard to extend it but it isn't finished so it doesn't look very pretty but there is about 1/3 acre there so I think $1175.00 is within reason. After bringing the home owner back down to reality in his asking price, is this how I should do it? Here was a plan that I came up with (please evaluate this for me) 1.) Sign up all the paper work with him (CA Residential Lease Agreement and Option to Purchase Contract and CA Assignment form ) with him at $120,400.00 for one year with $1175/month as rent and a $200.00 rent credit. 2.) Market the property for $120,400.00 with $3,000.00 down at $1175/mo with $200 rent credit 3.) Find T/B with $3K down and one who qualifies 4.) Assign my documents over to the T/B for the $3,000.00 fee I think that this will work because I am only increasing the price over market value at around a 5% mark up. If T/B exercises his option to purchase at the end of year one seller will get $115,000.00 which is $20,000.00 over and above what he has into the house which is $95,000.00. I think that it is a win-win situation for everyone. Let me know if this is the correct plan. Also you say that we shouldn't advertise or mention the option consideration until after we've talked to the T/B. So if I don't mention the option money how do I set up the marketing of the home? If a T/B has more to put down, how would I structure this then without pricing the home too high or allowing the seller to get my portion of the option money? Thanks.