Advice on how to counter the sellers option money

[belliott71 0]

I spoke with another seller who has a townhouse and he is moving out of state. He is willing to do a long term lease option and is selling below the comps in the area. It seems like every seller I have talked to is "has a real estate friend", but is not listed. It seems the agent friend has advised them on how to structure the deal. This seller I talked to wants $3000 option money and is selling for 137000 (other homes are selling for around 145000). I have no problem telling them I plan on finding another tenant, but I need some advice on how to counter the sellers option money. What advice does anyone have on coming back to the seller as to how to get in without putting any option money down.

 

Thanks for all the input,

 

Brad E

[<Steve> 82]

Sorry Mr Seller it's our (my) policy not to put down any type of option consideration.

 

Because . . .

 

Remind them of all the advantages:

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[Dan (SoCAl) 0]

It seems the agent friend has advised them on how to structure the deal.

 

Brad, his agent friend isn't structuring the deal or making the offer -- you are. You're offering to find, qualify and secure for the homeowner a tenant/buyer who intends to purchase the property at the end of the lease (with no management fees or commissions), pay the homeowner fair market rent over the life of the lease *and* pay first month's rent plus a security deposit up front.

 

Cost to the homeowner for your services: not one thin dime. Will his agent friend do that? No. Does he know anyone else who will? No. Will his agent friend give him $3000 for the privilege of working with him? Of course not.

 

I have no problem telling them I plan on finding another tenant, but I need some advice on how to counter the sellers option money.

 

You have to disclose the "I set up lease purchases for homeowners" early in the first conversation, before option money becomes an issue. You're never going to be his tenant; you're a professional lease purchase specialist. If he wants "option money," offer to show him -- for a fee -- how to properly structure a lease purchase so he can place advertising, field phone calls, show the property....oh wait; weren't you just offering to do all that for him for free????

 

Dan

[Jason (AL) 1]

Slick stuff, Dan.

 

You still doing these CAs out in Cali?

 

Sometimes I wish upon a star that homes were somewhat more expensive, so that I

could get more as my CA fee.

 

What's a brother to do?

[Adam King (MI) 1]

Brad,

Is this an SLO or a CA? If it's a CA stick to your guns on the fee, or give no more than half while making the seller help you with marketing.

 

If it's an SLO, then the money is your's to keep PERIOD! This is because it is your responsibility to hold that property and guarantee its condition.

 

Would like to see more detail in your post.

Adam

[MichaelC 160]

Brad, I would have tossed my two cents into the mix, but Dan already gave you the low-down. There's nothing more need be said.

And Jason, yeah, the Golden State is sweet, but do you really want to trade in those 'Bama babes for some greenbacks??

[Doug Pretorius (ON) 9]

Thanks Dan I'm going to plug that into my phone calls from now on because I've always had a hard time transitioning from personal "Would you happen to be interested?" to professional "I do this for a living."

 

"Hello, is this the owner of 123 Main Street?"

"Great, my name is Doug and I set up and/or manage rent to own deals for homeowners, so I was wondering if you would consider renting your property out?"

[belliott71 0]

Thanks everyone for all the excellent information.

 

Adam, this one has the potential to work out as a SLO. Here is some info

 

The owner has a 2 yr old 3/2.5 townhome and is moving out of town.

He has a 1st and 2nd (one or both are adjustable)

Asking 137000 comps in area are around 145000.

He is willing to do a 2yr L/O, I could possibly talk him into 3.

I could probably get the option price at 137000 because he didn't mention future price.

He wants 1000 per month rent

 

The easy way for me since I'm new would be a CA, but it has potential to be a SLO if I am up to it.

 

Thanks again for all the help.

 

Brad E

[Jason (AL) 1]

Brad, I would have tossed my two cents into the mix, but Dan already gave you the low-down. There's nothing more need be said.

And Jason, yeah, the Golden State is sweet, but do you really want to trade in those 'Bama babes for some greenbacks??

 

True...true....

 

But tradin' greenbacks for babes is more common

'round these parts....so I hear.

[MichaelC 160]

Brad, one more bit of advice. Don't over analyze the deal. Crunch the numbers, do your due diligence, then make the offer. The good deals don't wait around for you.

[Adam King (MI) 1]

Brad,

It's a very skinny SLO, but what I said above still sticks if you chase it. I always try to keep the option money in case things go south. And yes, a CA would be easier, but not with a Realtor involved that doens't know what you're doing.

Let us know how it goes.

Adam

[West Coast Girl 1]

I spoke with another seller who has a townhouse and he is moving out of state. He is willing to do a long term lease option and is selling below the comps in the area. It seems like every seller I have talked to is "has a real estate friend", but is not listed. It seems the agent friend has advised them on how to structure the deal. This seller I talked to wants $3000 option money and is selling for 137000 (other homes are selling for around 145000). I have no problem telling them I plan on finding another tenant, but I need some advice on how to counter the sellers option money. What advice does anyone have on coming back to the seller as to how to get in without putting any option money down.

 

Thanks for all the input,

 

Brad E

 

Those greedy "wannabe, ungrateful and uneducated investors" who are trying to ride your coat-tails and "steal" from YOU! BASTARDS!

 

Here's what I would suggest (whether it's a CA or a SLO, don't matter man)!

 

If and when you find a T/B, have them give you something of value that is worth the $3,000 cash option money. This way, you can sell it (or keep it if you like) whatever they put up as their equivalent money and then tell, that greedy "wannabe, ungrateful, uneducated investor", Sorry, pal, but I'm not receiving any money upfront, but am still willing to take the risk and help you out here!

 

Hey, you're not lying 'cause you're not receiving any cash upfront (just something of value that is equivalent to it). You WIN, They Lose! So sorry! If the seller doesn't like it, then there's nothing more that you can do, except walk away from the deal!

 

I hope you find some inspiration in this idea and an added twist on this delimma that you can also use in the future it this ever comes up again too!

 

Good luck!