<Steve>

Hey Mike! Well, I talk about the Home Owner Home Buyer Protection Act about as much as I talk about Landlord/Tenant Laws. Both we need to follow as investors. I do have a disclosure with a brief summary of the law the seller signs, but it is up to them to get more detail unless they ask my non-legal opinion. Regarding the option money, I put what I pay the seller in the option agreement and what the t/b pays in the assignment agreement. You could ad a line in the option agreement that states what the t/b pays, similar to the other t/b information that is added later, but it has not been an issue from attorney review. As far as schooling the seller, I do want the best for all parties in the deal. I truly want things to work. But I am not an attorney and this is an Arms-Length transaction. Meaning I am not representing seller or buyer, I represent myself. So, for legal explanations the seller will need to consult a licensed lawyer. If I advise it could come back to bite. If I get a call later after the deal is assigned, I am even more exposed as I am not in the deal any longer. I may give an example of a similar situation I've had, but would recommend an attorney and give them a couple of attorneys they could contact.

Never had the fun of having to deal with that, but technically there are no closing docs created until the option is exercised. It's just a lease at the start, right. The option agreement obligates the seller to sell.

With an out of state seller my attorney sent everyone the memorandum with each having their own signature page to notarize and mail back. When returned the attorney put everything together and recorded. So now, I leave it with the seller and have them mail back then record.

If I would be representing others as a licensee in the deal, which I haven't. I would use a real estate attorney. As an investor/principal a release can work using the closing attorney...http://www.naked-investor.com/forums/index.php?showtopic=5062

Well, I am the buyer/tenant of the seller/landlord. The seller has given me permission to sublease to a third party tenant with the option to buy. I am staying in the deal and am responsible for the sublease t/b. Therefore, it is in my best interest to place a quality t/b who is seriously interested in taking good care of the property, one who wants to buy and has the potential to buy in the near future. SLOs are my favorite lease purchase technique.

Marius- My goal is to get the best tenant/buyer I can for the seller, so I am not in a rush to place someone and there are plenty of potential tenant/buyer prospects anyway. So if I am doing a CA, I will do my due diligence with the application, and when I receive all the information needed and they look good, I will share it with the seller for their review. When I get the seller's approval, we then move forward with the final paper work to close the deal. A SLO is a little different because I am managing my interest in the deal with a tenant/buyer. Most of the time t/bs will be moving in the first day of the next month, giving me a couple weeks or so before the start of the lease. I like to get the full consideration when we sign the final paper work, but will take a partial. I will need all funds paid on or before move-in before the t/b gets the keys & possession. This also gives me time to complete the memorandum and any other lose ends to get ready for move-in. "When Steve talks, people listen" Wish someone would tell my kids that!

Hey MJ I charge $40. for an app fee. and that covers my expenses to process the application. If everything checks out ok, I will then accept the option consideration, or part of it, to hold the house. I don't typically supply a receipt unless they ask for one.

You don't screw in LEDs

Hey Mike- It is common for my SLOs where the term of the lease with the seller and the term of the lease with the tenant/buyer do not expire on the same date. Typically I want to keep the house and will ask the seller for a 12 month extension. Or, if I want to give the house back, I will ask the seller to extend to the end of the tenant/buyers lease term; in-addition, I will also mention that I would like a week or two after the tenant moves to make sure the house is in good shape when giving possession back to the seller.

LOL, I don't know about joining, but looking over the fence to see what's there. Thanks MC!

Hey Guys- My market is sloooooow. Housing shortage. Any nice houses in good areas sell fast. So, in my down time, I am going after my RE license

I see a couple of things you can do. If the t/b's lease has expired you can give notice to the t/b to move and place another tenant/buyer. Or, you can explain that due to the new pot laws (I assume) there is nothing you can do to legally evict regarding the plant growing. Put it on the seller and let her know you cannot pay her the rent when the house goes vacant until you can place another t/b.

Sellers concede on their purchase price all time so a buyer will purchase. For me a monthly credit/concession is a marketing tool to get a tenant/buyer to buy the option. Nothing to do with financing.

Jay- A seller concession can be for many things, and may include closing cost. I have seen buyers come back and ask if the seller would pay the buyer's closing cost. If agreed, the seller will increase the buyer's purchase price by the amount requested and update the purchase agreement with the modification. I would never tell a t/b that the concessions cover thier closing cost; in-fact, the t/b is resposible for all allowable closing cost.

I just emailed a FRBO property about doing a lease purchase, and an agent replied. She made it clear that she was representing the seller. She said the seller wanted to either sell it or lease it. No lease purchase! Yeah, but I'm offering the best of both? I had to remind the agent that she needed to refresh herself with the requirements to include that she is a realtor in her ad.

It took a lot of Cooperative Assignments to get that ride.

Ok, I just completed turning a proven SLO into me purchasing the property. I've had the property since 2007 and the current tenant/buyer for a few years. The seller wanted to just get rid of the house with the existing financing in place, so it was a nothing down deal. The tenant/buyer was then able to purchase with an agreement for deed. The advantage starting with a Sandwich Lease Option was being able to see how well the property would perform before committing to a longer term buy & hold. A continued win-win for everyone.

I love rent credits and would offer 50% up to 100%. It 's a great marketing tool. However, I will have to admit that I now offer a $dollar amount as a seller concession and call it a "Monthly Credit/Concession" when rents are paid timely. NC is probably the harshest state in the union when it comes to investors and creative deals. When the RE Commission & Attorney General latch on it can take a couple of years and an attorney to shake them off. They are looking, and would probably love to enforce dodd-frank with their interpretation including other state regulations. All it takes is a pissed t/b filing a complaint. No property is perfect, so I still offer a large concession as the seller conceds on the price when rents are paid on time because maybe the home needs updating, new carpet etc. Part of the concession can be used for closing cost per the lender's guid lines. So unfortunatety, I do not offer rents credits as a percentage to the purchase price. Principle pay down can be seen as financing. So far concessions seem to work just fine, but are not as cool as rent credits were.

Hey Brian- I understand what you're saying a bit more complicated though. MC's comment I think was to just assign over the agreement I have with the seller to the buyer for an assignment fee and let the buyer & seller go to close. But unfortunately, this time, the owner was not comfortable with owner financing.

Hey Tom- Sandwich lease option are not illegal here in NC, but they are State regulated. Check out the "Home Owner Home Buyer Protection Act" passed in 2010.

Good question MC. I will get a better feel when we meet in person. I think they have a windfall and need to act quickly in their mind and just love this house. The owner is out of state and haven't spoke with the owner yet. The assignment is a good way to go and if the seller receives the balance of $30K I am sure they will listen.

hmmm Just spoke with the potential t/b and they are for real. Their credit and income seem good to enter into a L/O and they have the potential to buy. They do want to adjust the rent amount lower by putting more down, which I anticipated and I can do that. There issue is if they put only part of the $52K down as option consideration they will loose what they don't use. So if I take $15K to $20K as option consideration lets say, what do I do with the rest of the cash. LOL nice problem to have. I could hold the balance in an escrow account should they purchase and return it if they decide not to buy? I'll be meeting with them in person this coming weekend to show the house and get to know them better.

I love when this... I have a new SLO that I just started marketing for a tenant/buyer. I just received a few emails from a married couple who just love the house and want it. They are offering to put down $52K It seems the house they are currently in the Department of Transportation is taking it to put a road through. I am guessing this is where the cash is coming from. My SLO house market value is $140K My price is $120K so I have 20K in equity in this 3 year SLO. The seller owes $59K on the current mortgage and they want their equity. If I keep it as a SLO I have $20K to work with and can double or triple what I would expect in option consideration. What's left of the $52K the t/b can keep in the bank for a down payment. Or, I could try and restructure the deal with the seller as owner financing and try to get the deed then finance the buyer. If I try to restructure the deal to get the deed I would need to lower my price to at least $90K and that may require I give the seller $30K so I would come out to about the same. Does anyone have any other ideas or strategies I should think about?

Hi all- I have 4 or 5 SLOs that I have had for several years now and they have proved to be great properties to buy and hold. I have been mentioning to some of the sellers that I am interested in buying the properties. However, I would not be going to the bank for financing. I would consider owner financing or taking over the existing financing. Either way I would need to get the deed. I have taken good care of these sellers and their properties and they have become very comfortable with the SLO set up. I am a tight wad and the sellers are not motivated to sell without me coming up with a large amount of cash, out of pocket, to buy with owner financing. Any ideas how to get these sellers motivated to sell without bank financing or me needing a large bank roll to put down? Anything I can mention or ideas to get them thinking of selling to me?

In my state if the house goes into foreclosure the option consideration will need to be returned. Maybe she will pay the back taxes maybe not, that is something I would ask myself before going into the deal. I mean why can't she pay them now? What will a couple of months do to make the difference? That is what I would ask her to help make your decision.