Calling Frbo

[Steve 0]

Hello all,

 

I've been calling lots of FRBO lately, and ask them for a long term lease, and then ask if they would consider selling at the end of the lease. I'm talking to a lot of people who are interested but just don't want to make that commitment up front. They say we'll have to wait to see what's the market like etc... I tell them about the advantages of selling by RTO but it seems they want to wait for the end of the lease to determine the price. Is there anything I can be saying to these people to change their minds and set a price now and get a deal done? Or should I not waste my time and move on?

 

Thanks,

 

Steve

[mpine 0]

Change your tact, explain the advantages, make sure they understand, then ask them if they would be interested in a 5 year lease with option to purchase, you will most likely get a "no" response to this, and that is ok/good, now you are going to ask them to hold on for a second while you talk to your partner. Come back to them and tell them "We can do a lease as short as 3 years, that wouldn't work for you would it?"

 

negative phrasing can be a very positive tool to get more people to say yes...

 

I would do it somewhat like this

 

You: "Hello Mr. Landlord, can you please tell me about your property?"

Landlord: "It is a beautiful house, 3 bedrooms, 2 baths, full use of backyard and we

updated the kitchen and bath 6 months ago"

 

You: "How has the response to your ad been? sounds like you are getting a lot of

interest in your property, right?"

 

Landlord: Actually your the first person to call me on my ad and I have run it for 2

weeks already."

 

You: "Well, I work with Renters looking to own homes, On average I am able to get

above market rents and price on home with Rent To Own, would you be open

to selling your house on a rent to own or probably not?"

 

Landlord: "I have read about about Rent to Own, I just didn't know how to use it, so

yes, I would definitely consider a Rent to Own, I just need this property

filled ASAP as I have mortgage payments coming due.

 

You: "Normally I sign up properties for 5 years, would that work for you mr.

Landlord?"

 

Landlord: "Actually that term is to long for me, I would love to get rid of this headache

sooner so my wife stops yelling at me for playing Investor"

 

You: "Well Mr. Landlord, let me talk to my partner for a second (hold button for 30

seconds) I typically arrange the deals so they sell with the first Tenant/Buyer,

but to really work my magic I need at least 3 years, would that be something

you could consider?"

 

Landlord: "I would love that, when can you come see the house? if you could do this

my wife might just KISS YOU! and I might not PUNCH you or KILL her for

it"

 

Good luck and I hope I have given you something to work off of.

 

Mike

[MichaelC 160]

I tell them about the advantages of selling by RTO but it seems they want to wait for the end of the lease to determine the price.

In addition to what Mike said, I'll add that you are not speaking with a motivated seller of any kind if they have that wait and see attitude. You can't force a square peg into a round hole. And if these folks have the luxury of time on their side you'll find yourself trying to do just that, Steve.

[Steve 0]

Thanks for the advice, I guess it really comes down to numbers game. Some people, no matter how hard you try will not want to do an RTO no matter what you tell them. Anyway, I do have a meeting with a seller tomorrow night, I probably should have just sent him too my website since he doesn't sound to motivated and saved my gas, but he lives near my girlfriend so I guess it gives me an excuse to go see her

 

I also met with a lady last week whose very interested in an RTO, but I also had to speak with her partner. He's also interested but doesn't really understand that I can't advertise and bring people to the house without being a principle in the deal. He's telling me if we can get a good deal and buyer, he owns 20 other properties that I can RTO as well. Weird thing is the lady I met with is a realtor, and she understands this so hopefully she can explain it to him better than I can.

 

Steve

[MichaelC 160]

Steve, it would help you greatly if you can get both parties in the same room at the same time when explaining how this works.

[Steve 0]

Michael,

 

I tried getting them together but they're both quite busy, the realtor tells me she has a hard enough time just talking to him on the phone.

 

I just went through another round of calling, no good leads, but I spoke with a property manager who thinks an RTO is a good way to sell a home. So he's keeping my information in case one his clients wants to sell. So in addition to calling the rentals, I'm also going to call on property management companies, and let them know what I do, hopefully I can get a lead that way.

 

Steve

[BEV! 0]

Just wondering where Steve lives, and what's his farm area? (City, State)

[Steve 0]

Hey Bev!

 

I'm from the far north, Mississauga, Ontario to be exact. I have my fellow beaver hunter, Doug to thank for getting me in on this!

 

Just in from another meeting, and the sellers interested, he's looking for a 3 year term and wants to know what kind of price I can get for him in 3 years. I'm gonna call my realtor friend and see what the prices are now. I think they're around the high 300,000s to low 400,000s, we'll see what he says. Now this is a new home, and the market for new homes here is hot, and I think they're appreciating about 10% a year. Should I stick with this 10%/year or come in with something lower to make sure the buyer is able to get financing?

 

Thanks

Steve

[Joseph44 0]

Hi Steve and everyone else,

I live here in fl suncoast,I run into the samething when

calling frbo NObody will commit to a puchase price upfront.Thae want to wait

till the end of the lease period.The problem you can't sell a home to a t/b on

this type of term.Or (can you)?Thanks and all have a good day!!

[Doug Pretorius (ON) 9]

Joseph, I didn't do it so keep in mind this is secondhand information. About 18 months ago it looked like my local market was heading in the same direction as Florida (thankfully it settled down a little).

 

An associate of mine was afraid of setting a price for his L/Os and losing out on appreciation, so what he did instead was write the option up something like this:

 

'Purchase price shall be $X or the average of the last 3 comparable sales, whichever is GREATER.'

 

He had no problem getting buyers to do the deals despite having a somewhat ambiguous price. So something like that might work to get your landlord friends onboard for some CAs.