How's Business

[<Steve> 82]

...and is the assignment fee called a non-refundable assignment fee in lieu of option consideration in the paper work? How is this explained to the tenant as being non-refundable as they are thinking 'refundable deposit' typically?

[Jonathan RexfordFL 8]

Interesting thoughts. I know when a realtor brings me a renter I usually pay 8-10% of the Annual Gross rents. Since I usually take 1st & security (to equal 2nd and half deposit). I am wondering that if it comes out of the rent.

[<Steve> 82]

Jonathan, wouldn't you need to be licesened in your example?

 

I am wondering that if it comes out of the rent.

 

Jonathan, are you saying that the tenant gets a rent discount spread over the lease term that equals their upfront assignment fee. Pre-paid rent basically. The higher the fee the lower the rent, or at least as low as what you have agreed to with the owner.

 

I think I might try and pitch something like this to a seller who's condo has been difficult to move.

[Jonathan RexfordFL 8]

Yeah you would need a license for that for sure Steve

[MichaelC 160]

DUH.....I must have had some of Joker's spray. Of course its tenant. Now one last question Batman. You are just doing a simple assignment with OWNERS approval I would assume.

JR, assignment is subject to homeowner's approval. I don't think they would consider working with me otherwise.

 

 

...and is the assignment fee called a non-refundable assignment fee in lieu of option consideration in the paper work? How is this explained to the tenant as being non-refundable as they are thinking 'refundable deposit' typically?

Steve, no mention of option consideration anywhere. Remember, this is just a straight lease. If I'm collecting, say, $900 as my fee, the Assignment of Agreement will note that "the assignment fee is considered part of the move in costs which total _______. Move in costs include first month's rent, last month's rent, and a security desposit in the amount of ________."

Make sense?

[Jonathan RexfordFL 8]

Great thread here. MC are you doing any prescreening IE Credit report, Verification of previous rents etc?

[MichaelC 160]

I'll advise the homeowner where to get a credit report or background check. But I want the homeowner to do their own due diligence and my not being involved in that decision to any extent. Paranoia on my part, perhaps?

But I'm offering a service at what amounts to half of what the local Realtor will charge, so I haven't run into any arguments over the cost of a credit report, and what homeowner will argue about having complete control over who lives in their house?

In effect, JR, I'm being paid for marketing and screening.

[<Steve> 82]

This is a good thread and yes that makes sense MC.

 

I just spoke to the seller of a CA condo I have and asked about marketing as a straight lease and also a L/O and he is good with that. I have a below market rent with the seller and am going to bring the rent up to market and offer a rent discount depending on how much the tenant will pay as an assignment fee. I am going to divide the assignment fee by twelve months (lease term) and subtract that from the monthly rent to the seller. The rent discount is really just for marketing for a tenant and really may not be necessary anyway.

 

See any holes?

 

I just need to think of an ad title for the discount.

 

"For Rent! Rent Discount!! For . . . "

[Jonathan RexfordFL 8]

I was hoping you were going to say that. So really all you are doing is marketing and answering the calls. Who ever has the cash can move in based on the owners approval.

 

Are you supplementing any documentations such as Applications etc? or are you even taking any applications.

[MichaelC 160]

I was hoping you were going to say that. So really all you are doing is marketing and answering the calls. Who ever has the cash can move in based on the owners approval.

Exactly.

 

Are you supplementing any documentations such as Applications etc? or are you even taking any applications.

I provide the Residential Lease Agreement, the Lease Application, and the Assignment Agreement. But I also give the homeowner the option of using their own, subject to my review. I want the homeowner to have no reason to say no to me, JR, by making the process as non-threatening as possible.

[Jonathan RexfordFL 8]

Now my head is spinning. It is funny as the houses I filled were rentals last week. 20 bandit signs and I had over 200 calls over a 7 day period. Sign was simple:

 

FOR RENT

3 BR'S

800*

772-321-2290

[MichaelC 160]

Now my head is spinning. It is funny as the houses I filled were rentals last week. 20 bandit signs and I had over 200 calls over a 7 day period. Sign was simple:

 

FOR RENT

3 BR'S

800*

772-321-2290

Wow! That's a heck of a bang for your buck! Homemade signs, Jonathan, or print shop? I assume you hired someone local to plant them for you? I ask because the response to my online marketing has been the worst I have ever experienced. I need to hire someone reliable to plant some signs for me.

[Jonathan RexfordFL 8]

They were made by hand by our Mutual Friend. He also placed them out. I did 30 signs over the weekend. Got some exercise. Real Estate Diet.

I did place an ad in the paper. I got two calls. One was someone interested and the other was from my Ad Rep telling me my ad was going to expire.

[Jonathan RexfordFL 8]

Jonathan, wouldn't you need to be licesened in your example?

 

I am wondering that if it comes out of the rent.

 

Jonathan, are you saying that the tenant gets a rent discount spread over the lease term that equals their upfront assignment fee. Pre-paid rent basically. The higher the fee the lower the rent, or at least as low as what you have agreed to with the owner.

 

I think I might try and pitch something like this to a seller who's condo has been difficult to move.

 

Steve,

 

My leases provide for discount rent for on time payment. I rented a 3/1 for 800.00. I collected $2,100. $800 1st month and $1,300 security. As far as assignment fee....I am new to this.

[<Steve> 82]

I was just brain storming with the assignment fee for a straight rental.

 

'Renters' are used to paying a security deposit with it being refunded at the end of the lease term. An assignment fee is not refunded, so I can see "deer eyes" from a potential renter. So having the assignment fee discount the monthly rent payment may make it more acceptable to the renter, and maybe even motivate a renter to pay a higher assignment fee. Or at least it gives you something to advertise that offers more than what other landlords offer.

 

I haven't completed any assigments with a staright rental either, but I think it's a cool spin to the Cooperative Assignment Lease Purchase we do. It's another good example how we can still be creative in a difficult maket when we use L/O techniques to invest.