<Steve> 82 Report post Posted June 20, 2008 Doug, I hold true to the 50% rent credit and depending on the responce especially for condos and town houses 75% is more the norm. There is more compitition out there now and the majority offer $200ish rent credits. Share this post Link to post Share on other sites
vballdarin 1 Report post Posted June 21, 2008 Good Golly Ms. Molly! After filtering through the MLS for words containing "motivated" or "lease purchase", I found 8 listings and emailed each of the Realtors with my schpeal. Within 6hours, 4 of them replied back that their sellers would entertain a Lease Option. Guess it's time for me to start number crunching! 4/2.5 ~169,000mkt value(very close to foreclosure)(may have to be a sub2)3/2.5 ~ 350,000mkt value(original owner-1998 & should have some equity)3/2.5 ~ 320,000mkt value(may go for:"purchase price is mortgage balance at time of closing") 3/2.5 ~ 194,000mkt value(no equity) Share this post Link to post Share on other sites
<Steve> 82 Report post Posted June 23, 2008 I found 8 listings and emailed each of the Realtors with my schpeal.How are you handling these realtors' commissions? Share this post Link to post Share on other sites
vballdarin 1 Report post Posted July 13, 2008 Hello ya'll.... Just a little update.... 1) started doing more marketing to find sellers and I'm learning to qualify them within about 10 minutes.2) drove 3 hours to a South Carolina REIA meeting, got some great contacts, and asked some questions of Wendy Patton from a Realtors point of view.(It was VERY helpful)3) dropped my Broker in favor for another firm who is investor friendly in our area. After interviewing them, I told them......"I'm NOT going to be a typical Realtor and get all the listings I can." I said "I'm going to be an INVESTOR who looking for deals for myself. Is that good for you or not?" They said "no problem...we'd love to have someone who is doing deals for him/herself." I ran an ad in the newspaper that said "Local Company needing 3-4 homes - Long term Lease-to-own". I can tell i'm getting closer to my first deal. ((Steve)).... The three times I tried to actually present a deal to another Realtor....one didn't understand at all (I didn't bother trying too hard to keep explaining it to her)....the second one went back to our Broker Associate who then went to our Broker in Charge and said some crap about me trying to circumvent paying commissions and being unethical by not giving them at least a letter of intent. (Hence i'm no longer there) The third one was a Broker who responded to my ad and asked why I wouldn't just put down a normal downpayment instead of just option consideration. I told him that I'm looking to purchase a few homes and if I tied up all my money in one property it wouldn't allow me to do more than one deal at a time. Basically I would give the Realtor 1%ish commission upfront-non refundable option money with the rest being payed at closing. I'm basically fronting the homeowners commission for their listing agent. If they aren't interested...I tell them "Well....I really do hope you sell the listing, BUT if you don't and don't want to lose all your advertising dollars....my door is always open." Question:I know to make a valid contract you need some type of consideration. Has anyone, doing a SLO, used the Residental Lease AS the valuable consideration? <---it was brought up in our REIA meeting. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted July 13, 2008 Just a little update.... 1) started doing more marketing to find sellers and I'm learning to qualify them within about 10 minutes.2) drove 3 hours to a South Carolina REIA meeting, got some great contacts, and asked some questions of Wendy Patton from a Realtors point of view.(It was VERY helpful)3) dropped my Broker in favor for another firm who is investor friendly in our area. After interviewing them, I told them......"I'm NOT going to be a typical Realtor and get all the listings I can." I said "I'm going to be an INVESTOR who looking for deals for myself. Is that good for you or not?" They said "no problem...we'd love to have someone who is doing deals for him/herself." I ran an ad in the newspaper that said "Local Company needing 3-4 homes - Long term Lease-to-own". I can tell i'm getting closer to my first deal.Nice work all around, Darin. Definitely agree: you're getting closer to your first deal. . .of many, I might add! Question:I know to make a valid contract you need some type of consideration. Has anyone, doing a SLO, used the Residental Lease AS the valuable consideration? <---it was brought up in our REIA meeting.I hadn't thought of that approach. Then again, if we are putting down one or five or ten dollars consideration, it's not a big deal, in my opinion. Share this post Link to post Share on other sites
vballdarin 1 Report post Posted July 13, 2008 Yea....and I don't know how well it would go over with the homeowner (explaining to them that the consideration IS the rental agreement)(it would just confuse things even more - K.I.S.S. Keep It Simple Stupid) It's probably just easier to say..."Well, we just have to put $10 into the deal to make it legal." Share this post Link to post Share on other sites
<Steve> 82 Report post Posted July 14, 2008 Hey Darin, Nice going, it seems you are making the moves and contacts you need to get you where you want to be. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted July 14, 2008 Yea....and I don't know how well it would go over with the homeowner (explaining to them that the consideration IS the rental agreement)(it would just confuse things even more - K.I.S.S. Keep It Simple Stupid) It's probably just easier to say..."Well, we just have to put $10 into the deal to make it legal."Exactly. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted July 14, 2008 Darin, I've used marketing as consideration on a pure option and the seller was fine with that. Most sellers think $1 consideration is silly anyway. When doing a deal with $1 I always make it an after-thought. After everything is signed I say (while reaching into my pocket): "Oh by the way, I have to give you $1 to make the contract legally binding." Every seller I've ever signed as laughed. Share this post Link to post Share on other sites
GetSmart 0 Report post Posted July 14, 2008 I am glad in NC you don't have to give a deposit for consideration. In NC "A binder or earnest money is not consideration and is not an essential element of a contract." Here as long as you have bargained or given a price in exchange for something of value that is consideration. Share this post Link to post Share on other sites
vballdarin 1 Report post Posted August 8, 2008 Well...i have been calling some FRBO's. One homeowner was a self-called-investor who was offering a rent-to-own at 1500/month on a 3/2.5 with 100% rent credit in a pretty nice little community. Normal market rent would be 1400ish/month for this neighborhood. He asked if since I was subletting it, would I guarentee the payments. I said absolutely. I'm calling him tomorrow to ask the more crutial questions..."What is the least you would need to sell?" & "Would you consider a 5 year lease?" Here are some more initial numbers:Built in 2005 (Newer community)Purchased on 8/2005 for $284,498Annual taxes 2,409POA fees $13922474 sq ft.Can't find any comps over the last calendar year.(probably worth 300,000ish) Besides the obvious questions of: How long would you lease it to me, Haggling on my purchase price, How much option money(which he never brought up in the inital conversation), Are there any other crutial questions to ask him? And...what different ways/scenerios could I make this deal work?Could I just find a straight renter for a year or 2 and work up some credits first before offering it as a L/O to a tenant/buyer?<------Thinking about putting it into my RothIRA. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted August 8, 2008 Darrin, sure, once you take control of the property your options include using the house as a straight rental. No harm in that, particularly if you get the house long term. Based on what you wrote, I think you would have to drive down the rent if you were to go this route. What you can ultimately do with the house will be better understood once you have the terms locked into place. Share this post Link to post Share on other sites
<Steve> 82 Report post Posted August 8, 2008 I agree with MC regarding the rent amount. Push for as low as you can get and find out what his monthly payment is. Also, the seller is offering a 100% rent credit for 1 year ($18K), so ditch the rent credit and drop the price at least another $18K. It seems you got the seller's interest with the guarenteed rent. So I would play that up. Good Luck! Share this post Link to post Share on other sites
vballdarin 1 Report post Posted August 10, 2008 Well, not good news. (Again) When I called the gentleman about the home he had advertised....I asked him "What purchase price do you NEED to sell the house and would you consider a 4-5 year lease?" He said that he didn't know about a purchase price...maybe 360,000ish and he's only looking for a 1ish year lease because it's not cashflowing for him. But...If I would be interested in leasing it for at least $2000 then he would consider at least a 2 year lease. <---- Talked to another seller who is relocating & bought at 283,000 last year (worth about 280,000) = numbers don't work. Talked to even another seller in Pre-Foreclosure who was willing to give me the deed(Sub2). Problem= For me to bring the house current, I have to come up with 26,000! God forbid that I would find someone that would be interested in me helping them with a CA! Sometimes I feel like I'm NEVER going to find a deal. And I need to get one soon as my checking account is going to go negative come this November! Every deal I look at doesn't seem to have the numbers working out. I can't get anyone to call from my Newspaper Ad: (Home not Selling?....Behind on Payments?....Relocating? We Buy & Lease Houses xxx-xxxx) and I can't put up any Bandit signs, none of the Realtors or Leasing agencies even reply to an email, Between being a caddy and Investor, I'm working 7 days a week/12 hours a day trying to market and find a deal. I realize it' just a numbers game but......UGGGGHHHHHHHH! Sorry about the rant. I'm starting to run out of options and money. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted August 10, 2008 Darin, for starters I would concentrate on Cooperative Assignments for the time being. The numbers can be much more forgiving since you're not in the middle of the deal. For example, if the property isn't cash flowing, (no surprise these days), that is the homeowner's concern, not your's. And by working with the homeowner and not negotiating against them, you'll find it much easier to have them sign on. You mentioned that you're having trouble finding homeowners willing to do a CA. This I find surprising. So my question is what approach are you taking with regards to this, and where are you finding these homeowners? Share this post Link to post Share on other sites
