I Have A Commited Buyer.

[JCannon 0]

How does this sound. I know $5500 is not much but I will gladly take it and move on if it means seeing that money this week.

 

I appreciate the time you have taken with this home. I will extend the chance to get into this property with only $5500 down. All other terms will remain the same. If you wish to have an optional third year on the lease an extention clause can be written into the Agreement. This extention will be completely your option. If you choose to exercise this extention additional option consideration of $1,500 will need to be paid to the homeowner and the rent rate will increase to $1450 per month. No additional rent credits will be extended and the purchase price will increase to $292,600 from $272,600.

 

I am sure you are aware of the profit potential of this property and understand that these terms are very reasonable and still in your favor.

 

Thank you for your time.

 

Feel free to play editor.

[Kimberly 0]

Looks good.

[MichaelC 160]

That's fine, JC. Run with it.

[JCannon 0]

I sent the email, we'll see what happens. I am still getting a lot of interest from Craig's List. With those, I'm going to shoot for the $7,000 that I originally planned on. First come first serve though.

[JCannon 0]

Mr. 3 year lease hasn't replied since I sent that last email

I am still getting interest but the lease begins Feb. 1st, I don't know why this hasn't been moved yet. The T/B is looking at buying a $330,000 home for $250,000 at the end of the lease.

[JCannon 0]

I recently got a reply that said,

 

Saw your ad in Craigs list.

 

What if I want to buy this house and rent it out.

 

What kind of rent can I get and what is the sale price of the house.

 

Thanks

 

I've received a few inquiries like this but have told them that I am looking for someone that wants to live in the house and eventually buy, but can they rent this house while still responsible for the lease? This may be someone trying to do a SLO but if he wants to lay down the Option Consideration and be responsible for the lease that's fine with me, I get my check and have no further obligation.

 

I know the seller will be like wha? you lease....they lease..... they rent.....huh? But the clock is ticking.......

[MichaelC 160]

JC, it sounds to me like that individual is looking to purchase a property with the intent of holding it as a long term rental. If this is the case, unless the homeowner is opposed to an immediate sale, get back to this person with a purchase price and the other information he has asked for. Ask a few questions of your own, and in the meantime continue marketing and fielding replies from all others that may come your way.

One other tip that came from last night's conference call: contact local mortgage brokers about applicants who cannot qualify presently. These people need to buy time before they can buy the house, and are good tenant/buyer prospects.

[Golflover 0]

MC,

 

For the ones that missed the conference last night, was there any mention of compensation for the mortgage brokers if they did find you a lead? What is the benefit for them helping you? Just by knowing they will get them financed in a year or two if we helped them out by doing a L/P?

[JCannon 0]

was there any mention of compensation for the mortgage brokers if they did find you a lead?

For me with this one particular deal I would be willing to give them $1000 if they refer me to a T/B. That still nets me plenty of money and is a worthwhile amount for any broker to dig up some files.

 

My current question is, can a T/B sublease or rent the property if they get the permission of homeowner? I figure as long as he's getting his rent payments and the first T/B is still resposible for maintenance why should he care?

 

I am also considering just letting the lease start and finding a renter myself, even if it is an alligator eating 2-3 hundred dollars per month, at the end of two years I can easily make a NET profit of $50,000. Even if appreciation is only 15% per year. Can the deal work out this way with the CA Agreements that I have in place? I know this is taking on some risk, but I'm just trying to find a solution for this deal.

[MichaelC 160]

MC,

 

For the ones that missed the conference last night, was there any mention of compensation for the mortgage brokers if they did find you a lead?  What is the benefit for them helping you?  Just by knowing they will get them financed in a year or two if we helped them out by doing a L/P?

<{POST_SNAPBACK}>

Their benefit is the chance to get that t/b the funding needed to close the deal within the year. Most mortgage brokers I know are very much open to this sort of set up.

 

For me with this one particular deal I would be willing to give them $1000 if they refer me to a T/B. That still nets me plenty of money and is a worthwhile amount for any broker to dig up some files.

 

My current question is, can a T/B sublease or rent the property if they get the permission of homeowner? I figure as long as he's getting his rent payments and the first T/B is still resposible for maintenance why should he care?

 

I am also considering just letting the lease start and finding a renter myself, even if it is an alligator eating 2-3 hundred dollars per month, at the end of two years I can easily make a NET profit of $50,000. Even if appreciation is only 15% per year. Can the deal work out this way with the CA Agreements that I have in place? I know this is taking on some risk, but I'm just trying to find a solution for this deal.

<{POST_SNAPBACK}>

$1K in compensation is nice of you, JC, but probably isn't necessary. I don't think any mortgage broker is holding out on you because you haven't greased their palms in advance. You may not have spoken to enough of them yet, or at least the one or two who are open to fostering this type of mutually beneficial relationship.

Yes, with the homeowner's permission, an existing t/b could sublet the property.

As for taking on the deal yourself, if you do decide to go that route, the wisest way would be to change the paperwork entirely. The CA papers are more restrictive than the paperwork for the sandwich lease. You definitely would want to use the latter. If you have any paperwork questions, PM me for help.

Now, having said that, I want to also say this: think long and hard about entering a deal that is losing money right off the bat. Been there, done that, and it can quickly become an ulcer for you if things don't work out. Using our agreements, we do have some "outs" to cut your liability if you have to bail. But, that's not our intent when we enter a deal.

[JCannon 0]

what is the best way to approach a mortgage broker?

Something like "hello, my name is blah blah, I have a house in blah blah I am selling on a Rent to Own. Do you know of someone that has recently failed to qualify for a home loan that might be interested in this house. If you do, they have plenty of time to clean up their credit and then re-apply for a mortgage with you that will be less than a 100% loan."

[MichaelC 160]

I think what you wrote is right along the lines of what you should say. You want to give the impression to the brokers you approach, (and you should speak with more than one), that this is your business and you're talking multiple properties and deals on a consistent basis, rather than a one shot deal. Make it worth their while. And then go out and do just that.