SIGNED!

[Doug Pretorius (ON) 9]

Gary, yeah this whole last month has been quite a ride, with that wholesale deal that got away, and now this CA that's getting close to being in the bag. Like you said, 6 weeks ago I would have told you that neither of those deals were even possible to find around here, nevermind close.

 

How are things going for you Gary? I haven't seen you post about any deals recently?

[Gary (MO) 0]

Thanks for asking Doug, and you're right - I've not done much recently. The last couple of months of my life have been very hectic. I'm not out of the game though - just 'slowed'. I'm trying to free up time to devote more attention and focus to this business.

 

On another note...have you talked to Jason (AL) or heard from him?

[Doug Pretorius (ON) 9]

No I haven't heard from Jason either, I wonder what he's up to.

 

Well the appointment went fairly well. The buyer applied, although they had some issues with the property and the down payment, so we'll see. I still have that other appointment tomorrow, and some more buyers to call back. And if none of those work out, there's still the open house on Sunday.

[Doug Pretorius (ON) 9]

Another question for you guys... what do you say to a T/B who says: "If this is RENT to own, why do I have to put money down? Shouldn't it just be first and last month's rent?"

 

I just said that's how it works, take it or leave it. But there's got to be a better answer than that!

[Adam King (MI) 1]

Doug,

 

"If this is RENT to own, why do I have to put money down? Shouldn't it just be first and last month's rent?"

 

Stop thinking. I can smell smoke from here!

Adam

[MichaelC 160]

Another question for you guys... what do you say to a T/B who says: "If this is RENT to own, why do I have to put money down? Shouldn't it just be first and last month's rent?"

 

I just said that's how it works, take it or leave it. But there's got to be a better answer than that!  

Perhaps you could have been a bit more, uh, tactful, Doug.

That's not an unusual question, and stems from the prospect thinking like a renter, not a buyer. Or like a tenant, not a tenant/buyer.

When I hear that question my usual reply is, "Joe, our objective is to sell this property, not to hold onto it as a rental. If we wanted to keep it we would simply rent it and continue to collect your rent money and give you nothing in exchange.

Instead, you know we are giving you that generous 50% rent credit to help you go from tenant to homeowner. To facilitate that goal, the purchase of any house requires some sort of down payment. This is no different, except that we are asking only a portion of what you would normally need to put down if you were buying today, and you will benefit from the $6,000 in rent credits earned during the next year."

Or something like that. Emphasize the positives: rent credits, lower down payment than if they were buying today, one year to arrange their financing, etc. If the prospect still squawks, talk to someone else. He/She has no money or is taking you for a fool. Tenant/Buyers are not usually a rare species.

[Gary (MO) 0]

Hey Doug....are you doing the credit app thing at the open house Sunday?

[Doug Pretorius (ON) 9]

Michael, in this particular case the question stems from the T/Bs claim that her parents bought their house by rent to own from the builder and were not required to put any money down. This is indeed a fairly common practice around here, but the builder requires excellent credit and income, neither of which this person has.

 

The funny thing is that when I mentioned that I will need ALL of the down payment once she's approved and signs the deal, she immediately looked to her mom like: "Do you and dad have it?" LOL! Her parents will co-sign at any rate, since there's no way in hell she can buy or rent to own it today by herself.

 

The good news is that the buyers I'm scheduled to meet tomorrow are (I think) less picky. They have been with me for several months hoping I would land the right house for them, and so far they like the looks of this one.

 

Anyway, thanks for the reply, I'll remember to keep the focus on the positives of my particular brand of RTO (which is quite different than most of my competition from builders and realtors).

 

Gary, I sure will. I charged these buyers $25, but I'm going to have to up that to $30, because my mortgage broker is temporarily unavailable and I'm going to have to get the reports online, which is nearly 5 times more expensive than he charges on a bad day! (On a good day he doesn't charge me anything)

[MichaelC 160]

Michael, in this particular case the question stems from the T/Bs claim that her parents bought their house by rent to own from the builder and were not required to put any money down. This is indeed a fairly common practice around here, but the builder requires excellent credit and income, neither of which this person has.

That brings up a good point. On occasion, a prospective t/b will question the terms, hoping I will negotiate. My reply is along the lines of, "Sure. I can do better on the price if you are buying today." Or, "Yes. I think I can do better on the monthly payment in exchange for some additional option money. What did you have in mind?"

I think taking this approach is better because it is neither confrontational nor offensive. That's what negotiating is: give and take. And once the t/b understands that to gain something they'll need to give something, the terms are no longer questioned.

[Doug Pretorius (ON) 9]

Update: I held an open house at the townhouse today, about 10 families came through (around 25 people) and 3 filled out applications.

 

Meanwhile, I got the credit info back on the second couple that I showed the house (the ones I thought would be less picky, and most certainly were!) and everything is a go. All they need to do is come up with the money by Tuesday. If they don't, I keep their deposit and call the next family on the list.

 

This business rocks!

 

I gotta go sign me up some more houses now.

[Adam King (MI) 1]

Doug,

99% of the people who fill out applications get the house. That usually means to me that they have already accepted all of the terms and have the money to work with.

Keep up the good progress!

Adam

[grannyguru 0]

Doug:

 

CONGRATULATIONS!!!!!

 

Alice

[MichaelC 160]

Nice open house results, Doug. Now, just wrap the deal up and finalize everything. Cash the check and invest in maple syrup futures, young man.

And, yeah, when you're done congratulating yourself, get back to work and do it again!

[socharming1 0]

Hey Doug,

 

What deposit? How much and why do you get to keep it? How do you do a credit check and whats the cost?

 

Thanks

[Mr.B 0]

He is talking about the Credit Application fee that he collects from potential Tenant Buyers. It usually cost some money to run peoples credit.

 

You always want to check you T/Bs credit history to make sure they don't have Forclosures or Evictions. I'm sure there may be other things to look out for as well.

 

You can try this website for running credit checks.

 

https://w3401.securedweb.net/mortgage-inves...on_landlord.htm

 

I have not used them yet, but I will probably give it a try once I get that far.

 

Good Luck

 

~Mr.B