Gordon Holtner

Andrew I agree with Jason about this guy having you cross line as an agent for him in the deal. But I think this guy is feeling you out to see what he can steal from you to make his own investments better. Something is fishy if he has this much experience and still wants to work with an outsider.

Hi i only have one thing to say about this twice a seller has tried to take my profit after finding how much I make because they felt it was their house. I would suggest when it is time to make an offer you say something like I am going to try and make a profit of _________ on this house is this a deal breaker for you? If they balk tell them that you have the contracts and the knowledge and that if they don't need your help tell them that it would probably be in both you best interests and call it a day and stop talking. If they have no problems and commit to that position they will never bother you about this again. Just try to find this out beforehand. Honest people don't find fault in an investor or business making profit and helping them. Gord

Here is just my two cents don't do deals with people who overprice their houses it will take too long to market. Also try to get a decent discount over the depreciation rate in your area then you don't have to add an addendum to your contracts. Disclose everything about the deal to the TB tell them that there is a risk that the purchase price may go lower than the agreed upon price in the contract and that they will have to deal with the seller if this happens.

MC you're right simpler is always better. I guess in the end it is always just better that we find deals with more equity so that stop losses can be put into place. If the houses don't appraise for the fmv in the future it could always be negotiated by the TB and the owner.

The option fee is nonrefundable to the Tb in the event that the seller defaults.No under MC's contracts you have no liability. Lets be honest here though the Tenant Buyer could just as easily decide to stop making rent payments and could be evicted. There are no guarantees that either the Tb or Seller will keep up their end in any deal. If you are worried for the Tbs just inform the TBs how to protect themselves in the deal.

Doug I've been thinking about this too. I have been thinking of an idea that may get around this. My idea doesn't depend on the idea that people will buy the house when they are qualified so much as they would any house. The idea is to get some market deduction based on today's FMV and have the seller sign a longer term lease option of say 3 years with a below market rent. Tell the TB that they will pay the traditional option consideration of say 2-3% but if they can pay the market or above market rent with the difference going to you as option consideration you would give them a no interest down payment to buy any house if at the end of the term if they manage their credit and qualify and keep the lease option contract in good standing. In this scenario of course the option consideration would be minus a small payment to you for your trouble and at the end of the term if they don't qualify you get the rest as well. My idea summed up is this the extra consideration that they pay is like insurance in case the house price falls and either way the TB wins even if the seller won't negotiate with them if the house price falls below the option price. I make this sound more complicated then it is but it would mean a larger sum for option consideration for us in the end. I have not tried this yet but by giving the TB the choice of a lower rent or protection from price drops and a chance to better qualify we can never be the bad guys they made their choice.

Hi Doug I just have two questions here in the scenario that you described. Since the buyer is getting their option consideration and rent credits factored in wouldn't this have to be a very conservative amount? Also wouldn't you have to make sure that the owner has enough equity in case the price dropped say 10-15% over the term of the option?

Alex, your problem isn't splitting option fees, it's about confidence. Make a list of all the things that you can reasonably offer a seller or just look at the LP Advantage and remember that you have something to offer sellers. If they could do this themselves they would have already. Remember your worth.

Aaron Make a promissory note if you want installments, get a lawyer to witness the signing and get the payments in post dated checks upfront. If you know some company that will help you automatically take the money out of the Tbs account every month that is even better. Gord

Aaron Yes caveats are pretty much the same as an option memo, I 've heard of performance mortagages in Canada but I've haven't used them and I don't know anyone who has. Do yourself a favor get a termination clause like Doug said in your contracts. I also get the feeling that you haven't talked to a lawyer about this yet you might want to get some idea about Alberta law. This is my suggestion buy Mcs course or find a contract you will be comfortable with so that you can explain to a lawyer what you want to do and get them to draft new contracts according to the residential tenancy act. This way you will be able to be 100% confident in what you are doing. This is what I am doing right now; keep in touch as a fellow Albertan I might be able to help you out in this regard in about a month. Gord

Mc I knew you were holding out on us now I am going to have to go for a visit all I see here in Alberta is chicks in coveralls

Mc I don't think I am that old. You just spoiled the dream for me; I always imagined you as the guy sipping Coronas in the sun looking at beautiful bikini babes while his wife is not looking

Mc Are you trying to put us off Florida because you want to keep all the babes for yourself?

My opinion on this would be to tell them something along the lines of what Bev said and telling the seller that you require the TB to give to the seller 12 post dated checks. This way the seller might feel more secure because they have something in hand.

Dion For starters don't make any promises that you can't keep. If you don't have a lender to work with your Tb do yourself a favor and honestly make them responsible for looking for financing. I tell people that I can't guarantee that they will get financed because I am not a lender and that if they take good care of their credit by not making large purchases with credit they will have a better chance to get a mortgage. If they balk don't do business with them because if they don't get a mortgage they might cause you legal problems. Gord