JPatt31

Oh.......absolutely! Thank you Michael

Gotcha... maybe I could make my offer contingent upon finding an end tenant buyer... Also, when not setting the option fee upfront, that would also mean I do not set the sales price either, because the option fee will create the sales price.... correct? So I let t/b's tell me what they have, and I add it to rent credits and seller's sales price to get my final sales price... am I right in this thinking?

Gotcha... maybe I could make my offer contingent upon finding an end tenant buyer...

It was originally $236,000 listed, now it is dropped to $209,900 on a month-to-month basis. I'm not sure on the 4% down... it just sounded good! I know that the neighborhood is nice, it is also by an Air Force Base. I planned on getting the acceptance from the seller under those terms, and then marketing the property without naming the price or option fee to see what I could get. When looking at the market values, I couldn't see where I could "fit in" any more than the $8,500.... so that's how I came up with the option fee. Thanks!!

Sup everyone Nice neighborhood, clean house. Listing expires. It was priced too high and it's one of the bigger ones in the neighborhood. ARV: Comps show $70 per sq. ft, and at 3,038 sq ft. its at 213,000 Rents: 1600-1800 Mtg. Payment: 1200 Term: Seller is negotiable, comfortable with 24 months Price: Seller wants 210,000 Option: Seller wants 2500 if 24 months, says 3750 if 36 month term. My offer: Cooperative Assignment: Sales price: 219,900 Rent: 1800 Term: 18 months Rent Credit: 35% Option Fee: Seller gets 2500, I get rest : $6000. So, $219,900 - 11340 (credits) - 8500 (option) = 200,600 net + the 2500 option = $203,100 net. Suggestions ? Thanks Justin

Don't know about the recording system, but you need to be careful. In Oklahoma, you can record any conversation that you are a party to. However, in other states, you can only record a conversation if you announce to the other party that you would like to record it and get their permission to do so. Make sure you know what your particular state's law is before you go down this road as there can be both civil and criminal penalties. My state's a 1-party consent and it's business related. Thanks .

Hey all! Question: Im wanting to record my phone calls with sellers to critique myself. Anyone using a phone recording system compatible with Mac? Thanks

Well, they want to do a CA deal. Im going to go for it, and include a clause contingent upon finding a tenant buyer.

Got it. I'll counter, and keep digging through the dirt

Hey guys Working a deal, started offer as a sandwich Owners have moved out of state asking price $158k (also mtg. balance) Mortgage payments $1304 Owners will only consider 12 months term. They also want $1000 of option fee. I started my offer at 1000 a month, 158k price, 3 years, then tried 2 years, to even 18 months.. almost lost it to a realtor, and after staying in contact with them, they see the value of a lease purchase, however... they want more than $1000 a month, since their payment is $1304 they are also wanting me to stay in the lease as a sandwich, since they live out of state, but there's just nothing really there monthly to justify it. I think market rent is 1200 - 1300, so was thinking marketing it as 1300 since a lease-to-own also, it is a tight deal, i think comps show it valued at around 165000 - 170000. Zillow shows 170k (if that means anything) House down the street for sale for 169000, very similar. I was going to market it for 169900. I really want to market as 50% rent credits to move it fast as well. So, you can see there's just not much room, other than a CA. Older home, but very clean in great area, and already move-in ready. Was thinking option fee of $5000, just leaving me enough to almost get to 50% rent credits with 12 months eating up the spread. Any ideas or suggestions? Their principle payment is $232 each month out of the $1304 I had made it known I would have an out-clause contingent upon finding a tenant What ways can I do a CA, but maybe help them out as well, charge a property manager fee on the side? Maybe set up a servicing company or something... What servicing company (for payments) do you guys recommend so I can check charges, and what home owner's warranty company do you recommend? The owners had mentioned using their $1000 for these.... I have built great rapport with these owners, and I know they would be the type to offer customer reviews for me... But Im concerned about the 12 month term and small spread. Thanks, and sorry so long! Justin

Thank you MC!

Well, I got to marketing and just started calling FSBO's and rentals... now I have an appt. tomorrow. Hmmm.... excited and feeling ignorant at the same time! Ive been looking at contracts and racking my small brain... Anyway, I just let the conversations flow and went as far as people would let me, and ending up closing this guy. I wanted to meet tomorrow bc I wasnt ready this evening to sign contracts.... but I confirmed with him over the phone what we had agreed upon verbally.... so we'll see. We ended up agreeing on a CA deal, and he would keep all monthly cashflow, and would receive $1000 of my option fee. His asking price is retail market, pretty close to what he said a listing agent was going to list if for.. I think it's right in line. He agreed he would come down on what he's asking to cover the option fee and rent credits. I made the mistake of not negotiating exactly what he'd get over the phone. I didnt really tell him a lot about the details, probably bc I dont know them, either... I just told him the advantages of LP, and that I would market the house, and he could have final approval of tenant buyer. He's already moved, has equity, but wants to hold out for his asking price. So he was thinking about renting it out.... glad I called. We'll see if Im being a big green-pea by tomorrow I guess. Now that I think of it, there's probably several things I shouldve done first....Dangit. Like, his wife on loan? , confirmed our inital date of lease period, exact sales price amount he's willing to net... oh well. Anway, Ive got questions about the contracts, which Im completely lost on.... and other stuff... 3 contracts I use are: CA Res. Lease Agreement, Option to purchase agreement, CA Assignment agreement. 1. My final tenant buyer doesn't go on anything except as assignee on the CA assignment of agreement contract, correct? I am the tenant and optionee on the other two? Fixed term agreement: 2.. I recommended 24 months, he ended up agreeing. would 18 hurt? Im thinking about this bc of the rent credits to allow.. 3.. What does: "Thereafter, this agreement shall become a month to month agreement only if landlord accepts rent from tenants" mean? 4.. I want to cushion myself for March 1. If final tenant buyer wants to move-in end of Jan. , then what do we do about dates on contract if I started it march. 1? 5. Both parties initial on bottom of contracts? 6. Occupants section: When does that get filled out? 7. Insurance: Homeowner's insurance covers liablity insurance for tenants? 8. I should recommend renter's insurance? Is it law to have renter's insurance? 9. (On Option to purchase agreement): "The full purchase price shall be ... ( ) at the time the option is exercised less any designated option money and rent credit" -This = seller's asking price + my option fee + assignment fee + total rent credits? 10. Option consideration: This is my option consideration to make contract valid? So $1 or $10 dollars?? And, I make sure this is credited to purchase price as well? 11. Closing costs: all closing costs paid by tenant/buyer, including what traditionally the seller would have to pay.? (except prop. taxes, 12. Add a section with exact maintenance costs? Like "anything under $200 tenant/optionee is responsible for, anything over $200 landlord/owner is responsible for. ? 13. Assignment of agreements: Im first ?(assignor) , "by and between assignor and" (my seller?) 14. Where do I add an addendum for his $1000 he gets? Is this a separate document, or do I add it to one of these contracts? How do I word it? 15. What else should I do? Title search? Memorandum? 16. What about escrow? If he asks about it, what should I recommend and how involved should I be? 17. I went ahead and started an LLC because it was $45. How and where do I fill my business name in? Everywhere except signature, Im guessing, and then sign my personal name in the signatures? Sorry I had 17 questions. Am I understanding the contracts correctly?

Thanks a lot.

Hey all After many months of studying Real Estate investing and stumbling across lease purchasing, I'm just another newb popping in and ready to start something. What an awesome strategy! So I read through these posts and learned a lot, and after reading them I've learned this: I shouldn't get an LLC yet or whatever entity I choose I should beware of paralysis of analysis I shouldn't worry about legalities, for Im a principle in the transaction... and MC's contracts will suffice. My plan is starting after Christmas, to make at least 5 phone calls a day, and work up to 10 calls a day when adding follow-ups... until I get my first deal, using my personal name in an assignment or co-op. Then I can put that money to use along with a business model..? My questions are these: 1. Should I not go ahead and first let an attorney from my state look contracts over? 2. Should I start a website now, or at least start the process by registering domains, writing blogs, blah, blah.. etc.......? Thanks everyone and Merry Christmas! Justin