LOL now I need encouragement :)

[<Steve> 82]

MC, long distant L/O might make a for a another good chapter in the manual. Not to change the subject, but has the manual or any of the agreements had any updates recently? Just curious in case I need to bring current my library.

[MichaelC 160]

Actually, good idea Steve, and one I have been thinking about. And as for updates, none as I write this. For over a year now I have been wanting to sit down in front of the PC and do a complete rewrite and second edition of The Naked Investor manual. But it's not a small undertaking and the problem is, as usual, finding the time to do so.

[phil43 0]

Sometimes you just have to trust the homeowner to do the right thing. I have found that the vast majority of homeowners we deal with are simply anxious to get the deal done and aren't concerned with screwing us over. And most of these deals require our guidance and know how along the way, as well as the required paperwork.

 

 

MC,

 

I'm intrigued about your long distance deals. How do you handle the paper work. Are you faxing signed agreements back and forth?

 

Phil

[MichaelC 160]

Faxed, followed by mail.

[Steve Morton 0]

I Just want to be to be clear on your process MC...

 

Step #1. Locate motivated seller, tell them about all the benefits they will receive with a lease purchase etc.

 

Step #2. After the seller accepts your offer, fax over the CA residential lease agreement and the option to purchase agreement, already signed by you. Instruct the seller to sign it themselves?

 

Step #3 Market for tenant/buyer (instruct seller to do the same). Once you find a suitable candidate, set up an appointment for them to view property.

 

Step #4 When you have a tenant/buyer who wants it, you set up a meeting between the seller and the tenant/buyer.

 

Step #5 You then fax over a signed, CA Assignment of Agreement with the amount of the option consideration of the tenant/buyer already filled in. You instruct the seller to present it to the tenant/buyer for their signature.

 

Step #6 Once the seller and the tenant/buyer finalize the agreement and sign the paper work, you then instruct the tenant/buyer to make out two checks. One for half of the option consideration to you, and the other half for the homeowner. You then instruct either the seller or the tenant/buyer to mail it to you?

 

Am I close MC?

 

Also, Do you think it would be possible to just have the tenant/buyer mail you a check for the whole amount?

[MichaelC 160]

Steve, you have the gist of it.

Step #1. Locate motivated seller, tell them about all the benefits they will receive with a lease purchase etc.

Yes. Keep in mind with these long distance deals I am approaching them strictly as CA's. I'm not interested in being in the middle of a deal from a distance.

 

Step #2. After the seller accepts your offer, fax over the CA residential lease agreement and the option to purchase agreement, already signed by you. Instruct the seller to sign it themselves?

Yes.

 

Step #3 Market for tenant/buyer (instruct seller to do the same). Once you find a suitable candidate, set up an appointment for them to view property.

Yes. Remember that the homeowner is handling the local marketing, but with your phone number on whatever marketing they are using.

 

Step #4 When you have a tenant/buyer who wants it, you set up a meeting between the seller and the tenant/buyer.

Yes. But keep in mind that before you get to this point, you have been in touch with both parties, who see you as a necessary part of the picture. Answering their questions, (and they'll have them), asking questions, and leading them around. You have been an integral part of the deal up to now.

 

Step #5 You then fax over a signed, CA Assignment of Agreement with the amount of the option consideration of the tenant/buyer already filled in. You instruct the seller to present it to the tenant/buyer for their signature.

Correct.

 

Step #6 Once the seller and the tenant/buyer finalize the agreement and sign the paper work, you then instruct the tenant/buyer to make out two checks. One for half of the option consideration to you, and the other half for the homeowner. You then instruct either the seller or the tenant/buyer to mail it to you?

Actually, before the t/b meets the owner to sign the papers, I instruct them to bring a cashier's check payable to me in the agreed to amount. I then have the homeowner mail that check to me.

[Steve Morton 0]

Thanks MC.

 

Does the tenant/buyer ever seem weary of bringing out a check made out to you, since they never met you in person, or any other similar reason like that ?

 

And do you always offer to split the option consideration with the seller? (I'm not greedy, just curious)

[MichaelC 160]

Does the tenant/buyer ever seem weary of bringing out a check made out to you, since they never met you in person, or any other similar reason like that ?

No. They understand I am "working" for the homeowner and that is my fee. They are also receiving the Assignment Agreement showing their payment is option consideration to be applied to the purchase. Everyone is cool.

 

And do you always offer to split the option consideration with the seller? (I'm not greedy, just curious)

With these long distance CA's, yeah, I have been splitting the option money. I've said previously that I can't imagine a homeowner agreeing to give me all when I have them working on all the local stuff. Then again, maybe we should try. . .

[rpoissa 0]

MC, Thanks for the explanation of the "hybrid". One question, the TB brings two checks, each for half of the deposit. Now, how much does it say on the assignment agreement? Because if it says the full amount, which is obviously the amount of credit the TB wants towards the house, then doesn't it look like you are earning twice as much as you really are? I mean if you were ever audited and showed that paperwork how would explain that? Is this how it works?

RobP

[MichaelC 160]

Rob, first, I have never been audited. Could be my four passports, six social security numbers, and the fake nose and glasses disguise I wear at all times. . .

If the option money totals $8K, then I am getting $4K under this deal. The Assignment of Agreement will show $8K. But if I am ever audited or need to prove that I received $4K, that wouldn't be a problem. I suppose a copy of the check, following up with the t/b and homeowner, etc.

[Jason (AL) 1]

C'mon, Michael...

 

You wouldn't be Italian if you paid yer taxes.

 

Ain't that what usually brings y'all down?

...or is that just in the movies?

[rpoissa 0]

Great, thanks MC!

[Steve Morton 0]

Sorry if this seems like a dumb question MC, but do you have the tenant/buyer make the check or money order out to you personally using this method? Or do you tell them to make it out to your company name?

 

I'm curious because I would assume that it would be a real hassle trying to cash a money order sent in the name of your business instead of your own.

 

Also, do you think the tenant/buyer would feel more comfortable sending a check made out to a business, instead of a person? Or does it not matter?

[MichaelC 160]

Sorry if this seems like a dumb question MC, but do you have the tenant/buyer make the check or money order out to you personally using this method? Or do you tell them to make it out to your company name?

 

I'm curious because I would assume that it would be a real hassle trying to cash a money order sent in the name of your business instead of your own.

It would be a hassle if a check is made payable to Steve Morton Properties, and there is no account under this name at the bank. Otherwise, it's the same as cashing or depositing any check.

 

Also, do you think the tenant/buyer would feel more comfortable sending a check made out to a business, instead of a person? Or does it not matter?

I can't see how that matters one bit.