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benjyjim

Newbie, both feet in water, now what?

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Just found the L/P concept and jumped in with both feet. Got an 800 viocemail number for $10/month, took out a generic ad (rto, nice areas...), and I now have 5 people wanting to talk with me. I thought the easy part would be finding houses, and the hard part finding buyers. Am I dead wrong about this? Now, I'm faced with a mountain of work for those that pass my initial call back/screening--each wants a house and I have none.

 

Next, when I call on the FSBO ads (which I assume is the most direct, low budget way to find homes), what's the best way to get comps? I know about homeradar.com and some other like sites as well as the county auditor and domania.com. I just have a hard time getting comfy that what I've got is a "fair" comp and that I can work to create my spread from there.

 

So, I guess I'm looking for tips on getting started & working smart and even full-on "you fool!" critiques of what I've gotten myself into already.

 

I'm stunned at the response--is it beginner's luck or are people out there starving for L/P solutions that defy "the establishment" (i.e. realtors)?

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Did you order the course on this site yet? I have it and it is a great course. If you just started this course would be percect for you and it also has the contracts you need.

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Hi Benjy, and welcome aboard. We're glad to have you join us.

You say you just discovered the lease purchase concept? Quite an eye opener, isn't it? The Naked Investor is all about the Lease Purchase Advantage. I realize I have a biased perspective, :), but you've come to the right place, my friend.

For starters, your early experience is not unusual. The easy part of this equation is finding the tenant/buyers. One well worded ad will pull them in faster than roaches on crack.

Of course, that means the difficult part of the equation is finding the properties to meet that demand, and you need to start by concentrating on finding homeowners open to your creative ideas.

There are two ways to find those sellers: call on every FSBO and FRBO you can find, and market like a demon so they can find you.

As for determining FMV, that isn't usually difficult. There are a number of free online sites of varying quality. There are also a number of services you can pay for, ($10 per address, not a bad deal at all in my opinion), online as well.

However, my advice for now is don't worry about things like comps today. Today, you need to find a seller willing to deal with you. Then, we can help you with all the other fun stuff.

Stick around, Benjyjim. There's a place waiting for you on the Real Deals page.

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Thanks so much for the advice. I feel very warmly welcomed. I have a comment and a followup question.

Comment: I, uh, got someone else's materials. Someone came to investor's club meeting and presented and one thing led to another... does this make me less eligible for help here? :)

 

Question: I am drowning in data--addresses, names, needs, wants, $/month affordability, per month PITI for FS/R-BO's... What program (any freeware? shareware?) has been proven to be best and well worth it for this pursuit and then, ideally, for re-use in printing labels and doing marketing?

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Benjyjim, whatever materials you may have are fine. You are certainly under no obligation to spend any money here. That is not what this board is about. If I, or anyone else here can help you, we will.

You're drowing in data because you are concering yourself with much of the little details that don't matter today.

All of what you are concerning yourself with now, while perfectly legitimate, shouldn't concern you today. Your biggest obstacle and what should be your only objective today is to be speaking with homeowners about lease purchasing their property. Every thing else is secondary at this time: tenant/buyers, contracts, etc. You'll find, Benjyjim, that the most difficult part of this business is locating the homeowners who will lease purchase their property. This is why you need to spend the bulk of your time in pursuit of this activity.

Having said all that, the good news is you're staying organized. No small factor in being successful.

I can't recommend any particular software program for helping in this matter. I am not much into the computer-high tech stuff. I use my own organizing methods which, in this day and age, is decidely low-tech. But, it works for me.

If you hear of anything that fits your needs in this matter, please pass it along on the board. I'm sure there are others than can use the help.

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Hey, it's me again... I'm making progress, but I have a roadblock that I need to know how to get around.

I'm setting aside nightly time to call on homes. What I find most often is that people "need the $ now" and I don't have the right answer for them. In my novice understanding, they get their purchase price (or whatever price I can set with them) in 1-3 years' time IF the option is exercised.

 

How can I help them get their equity out AND do a Lease Purchase? I was thinking that it would not be too hard to re-fi, take $ out, and then do the deal with me. But, then I was thinking that, let's say they're transferring, lenders might not like the idea of them carrying a house AND buying another one.

 

(I feel like a human decision tree--I get out there, make calls, find an objection, and need help overcoming it--if, then, else logic--but I also feel like I'm closing in on a comprehensive sales message for any seller I talk to!)

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Benjyjim, that objection you hear is, without question, objection numero uno. I hear it daily, too. Everybody wants all cash, all the time. Truth is, in some cases, the homeowner really does need it. OK, we don't fight 'em, because we'll lose every time. Wish 'em luck and move on.

I always suggest a refi as a possible win/win solution to their dilemma. It allows them to pull out the cash they need, and probably with interest rates so low, it may lower their monthly payments, as well. As you alluded, now they have their cake and can eat it, too.

As for the lender, they are usually not a problem. They will ask for proof that the present property is going to have the payments on it covered. That is a simple matter of showing a signed lease agreement on the property.

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Update (3weeks of reading like heck and working the phones)

Well, it's (practically) official: the hard part *is* finding the house--or, rather, the people willing to make a deal with you. There are clearly people out there interested in moving into the L/P's I can create. I know this from my generic ads on both sides: "RTO, nice areas, call!" vs. "Need home now, call me". (I have about 7 potential tenants and 0 houses.) So, I must keep calling the FSBOs and FRBOs. I'm setting up meetings with some realtor friends, too, to help me set up "Operation: Autopilot", which, if successful, will allow me, through a few of the right contacts, access to a qualified sub-set of properties worth calling upon--thereby leveraging my time. OK, not really auto-pilot, but more so than it is now.

 

My questions:

1. What do I ask for from an agent? expired listings? motivated sellers? DOM > 120 days? sellers using the "RENT" word?

 

2. Are there any concerns the agent will have, given that they want first chance to list/sell and would much rather force that route with any potential client than give that up to me even if my offering is a better fit? (e.g. I can forsee a conflict of interest concern for the agent who sees that I could really help someone, but the client only knows about the "R.E. establishment" and not creative R.E.)

 

3. What should I offer in return? I'm thinking about 25% of option money for, say, the first 5 deals that go through to the end with me, then we can talk again. I want it to be a very positive relationship, but I never want to pay too much. What's fair, and what's right?

 

4. After traditional listing agents/buyer's brokers, who are my next targets to help me deploy "Operation: Autopilot"? I'm thinking accountants, lawyers (esp. divorce, bankruptcy...), financial planners. What do you think?

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Benjyjim, I don't think you need to be so specific with any Realtor. If you find one or two good ones who you can foster a business relationship with, you'll be that much better off. If you let them know what you are trying to do, they will understand when a viable prospect is worth passing along to you. In exchange, you can offer them some cash for any deal you secure from one of these leads. Maybe you can offer them homeowner leads, instead. Say you meet with a homeowner and after doing so you realize this is not someone you can do business with. What they really want is to just sell their home in the traditional way. You put them in touch with the Realtor. The Realtor picks up a listing. One hand washes the other......

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