inspections surveys

[Guest Joseph_44]

MichaelC hi it's me again on l/o would we ever get involved in

inspections termite,home, or surveys or would that be worked

out with the tennet/buyer and the seller. We just set the wheels

in motion to make an aggreement with the seller and to get a

t/b in place.Thanks again

[MichaelC 160]

That's another reason I like to call this the Lease Purchase Advantage. All the various inspections are the responsibility of the end purchaser, the tenant/buyer. If we have set up our sandwich lease as we should, and have used strong Agreements to protect ourselves, we are in the position of not needing to be involved in the actual purchase and sale of the property.

If and when the option to purchase is exercised, at the close we simply need to sign some paperwork and collect a check for whatever back end profits exist. Smart real estate, I say .

[-Tony- 0]

MC,

 

I was going to do this to be funny and bring back the very last post... well now I have a question on it

That's another reason I like to call this the Lease Purchase Advantage. All the various inspections are the responsibility of the end purchaser, the tenant/buyer. If we have set up our sandwich lease as we should, and have used strong Agreements to protect ourselves, we are in the position of not needing to be involved in the actual purchase and sale of the property.

If and when the option to purchase is exercised, at the close we simply need to sign some paperwork and collect a check for whatever back end profits exist. Smart real estate, I say

 

do you do a double close????????

[MichaelC 160]

Generally, you would close first with the seller. That is followed by your closing with the tenant/buyer.

[JerseyJeff 0]

I must admit, my biggest confusion with this whole "Lease Purchase Thing" is what happens when the T/b decides to exercise his/her option to purchase in a sandwich lease. I think I've asked this question before, but I am still confused. I have heard you do a double-close, or, you close with the seller, and then sell to the T/B. But to someone who's never done it before, it's confusing.

 

Can someone shed some light on this with perhaps a step by step? Feel free to use diagrams and charts where needed .

 

Thanks

 

JerseyJeff

[NickC 0]

JerseyJeff,

 

I'll try an give it a shot....try and clarify the double close:

 

When your t/b qualifies for financing, you'd set up a closing date with your closing attorney, seller, and t/b.

 

Your t/b brings their financing to the table. Using that financing......you go into one room with seller to close; pay off existing liens and seller's equity (if any), and get title transfered to you.

 

You then walk into another room with your t/b and close out with them, transfering title to them.

 

Once that is done, you collect a check for your profits; then hit the beach!

 

Now, title seasoning may be an issue due to the fact that your on title for literally minutes, and some lenders require you to be on title for at least one year; typically.

 

To get around this issue and get the deal closed, you have a couple of alternatives:

 

1) Assign your contract to your t/b, and collect your assignment fee which would be your back-end profit in the deal.

 

2) If you had a performance mortgage signed with the seller; you could assign your contract to your t/b; let your t/b close with your seller, and have the t/b pay your p/m off, which was a lien put on title.

 

Considering I have not done one just yet; did I leave anything out? Anybody?

 

Thanks.

Nick

[MichaelC 160]

I have a much easier method: I bring all the paperwork involved in the deal, dump it on my friend at the title company, and she handles the rest.

Work smarter, not harder.

[JerseyJeff 0]

MichaelC,

 

What does one do if they don't have any "friends" at the title company. Is this something that, when the time arrivies, I can call the local title co. and they will come and assist, or is this a special arrangement you have made with your friend?

 

I assume, all of the paperwork is just the contracts that were signed?

 

Is there anything that is needed on our part? Lawyers, financing, etc.?

 

As always, thanks.

 

JerseyJeff

[MichaelC 160]

Jeff, as you become involved in this business, a big part of your success comes from your "network" of others in related businesses who you develop friendships and business relationships with.

My friend at the title company, for example, came about after doing a Cooperative Assignment with her sister, who mentioned to me she has a sister at the title company. I threw some business her way, did a Cooperative Assignment on a rental property she had, too, and before long I had "inside help".

When the time comes that you need to close on a deal, you'll call around to see who earns your business. You're not asking them to do you a favor, Jeff. You're offering your business to them. You will not have doors close in your face. The second time you call, they will know you. It grows from there.

The paperwork includes your original agreements with the homeowner and the tenant/buyer, if you're talking about a sandwich lease. There will be some additional paperwork, which will vary according to how these deals are handled locally.

You only need financing if you are buying the property yourself. If you are in the middle of a sandwich lease, the financing is the responsibility of the tenant/buyer.

You will need an attorney only if that is how real estate closings are traditionally handled in your area.

In some parts of the country that is standard operating procedure. Other parts, an attorney is rarely used unless there is something very unusual about the deal.

[JerseyJeff 0]

Thanks for the reply.

 

Just to confirm, if/when I set up a sandwich and the T/b wants to exercise their option, I can call some title co's in my area, and they will charge a fee to take care of everything? If this is correct, am I responsible for the fee, or is that considered part of closing costs?

 

Also, would the T/B or seller have, or want to use their title co? Would a conflict like this ever arise?

 

Also also, could I ask the title co. if a lawyer needs to be present for my area? They might be able to recommend one or have one in house. They could also indicate what other local paperwork is needed?

 

As I have said, this is the only area of LPing that is still confusing to me, so I just want to try to understand.

 

Always appreciated.

 

JerseyJeff

[MichaelC 160]

Just to confirm, if/when I set up a sandwich and the T/b wants to exercise their option, I can call some title co's in my area, and they will charge a fee to take care of everything? If this is correct, am I responsible for the fee, or is that considered part of closing costs?

Yes, Jeff, that pretty much sums it up. The title company fees would be part of the closing costs. The agreement you have signed with the tenant/buyer states that they will pay all allowable closing costs. You should have no out of pocket expense with this setup.

Also, would the T/B or seller have, or want to use their title co? Would a conflict like this ever arise?

Sure, they could. It's not a big deal and not a deal killer.

Also also, could I ask the title co. if a lawyer needs to be present for my area? They might be able to recommend one or have one in house. They could also indicate what other local paperwork is needed?

Again, yes. The title company is working for you and being paid by you for their assistance. They will lead you to the path of glory and righteousness.............

[JerseyJeff 0]

Well, if everything is according to what you have stated (and I know you wouldn't lie to me ) then that seems pretty simple.

 

One last Q. If they seller or T/B want to use their title co., do I need to ask for their information to call them in advance of the "sit down" and explain the situation to them?

 

Do you think it would be a good idea to make some calls to some local title co's and tell them what I do, and ask if they would be available when a T/b exercises the option to buy? I could probably also ask them about local paperwork needed and if a lawyer is needed? This way, when the time arises, I'll be prepared.

 

Thoughts...?

 

Is there a certain name for the title co. person to ask for when I call?

 

JerseyJeff

[MichaelC 160]

Jeff, you're overthinking the process and looking too far down the road. That said, I'll still reply, (whatta guy!).

Whatever title company you use, they will need to know everyone's names and contact information so they can call you as necessary.

As for calling some title companies now, while it may not be required it wouldn't hurt to do so, especially if it gives you peace of mind. Ask to speak with a customer service rep.

[man 0]

Regarding title companies...

 

I have found that they are more than happy to help you once they know what you are trying to do. I contacted an agent at Chicago Title Co. They gave me an account to their premier services, which I can log into from my computer and get instant property profiles. Along with that, I let him know what I'm planning on doing, and he wants to setup a meeting with me for next week to introduce me to one of the escrow agents and give me some material. Cool deal for me