Questions after reading "the manual"

[scntaxpro 0]

So i ordered the manual and have finished reading every page.

 

I now have a few questions.

 

1. How important is it to have a website for this type of business?

 

2. Do I need to set up an LLC before i represent myself as an owner of a property management company?>

 

3. Why do you have to apply the option money towards the purchase price of the home?

 

4. What do i tell a potential customer when they ask me how much experience i have at this or if they ask to talk to prior customers?

[MichaelC 160]

1. How important is it to have a website for this type of business?

I'm probably in the minority, but I would say a website is not mandatory, especially if you are just starting out. It certainly doesn't hurt to have one, but I doubt the need for it right out of the box. I can count on two fingers the number of times a homeowner has asked me for my website as a determining factor in whether or not they will give me their business.

 

2. Do I need to set up an LLC before i represent myself as an owner of a property management company?

Need? No. But probably a good idea to help cover your backside should you need to. Signing your agreement under your LLC rather than your name lessens your exposure. And depending upon your state, an LLC can be inexpensive to set up. Check with your state's Secretary of State website.

 

3. Why do you have to apply the option money towards the purchase price of the home?

I assume you are talking about a CA? If so, I can't imagine any tenant/buyer laying down $5K and not receiving anything for it. By applying it toward the purchase of the property, they're receiving something in exchange.

 

4. What do i tell a potential customer when they ask me how much experience i have at this or if they ask to talk to prior customers?

If the question comes up, and it rarely does, you need to be honest. Tell the homeowner you're relatively new at this, but are motivated to prove your worth and that they are in control of who moves into their house, etc. This ought to calm all but the most nervous of homeowners.

[scntaxpro 0]

4. What do i tell a potential customer when they ask me how much experience i have at this or if they ask to talk to prior customers?

If the question comes up, and it rarely does, you need to be honest. Tell the homeowner you're relatively new at this, but are motivated to prove your worth and that they are in control of who moves into their house, etc. This ought to calm all but the most nervous of homeowners.

 

Michael, thanks for the quick response and thanks especially for the manual. it was a quick read and was very practical.

 

I do have one other question in response to your answer above. You said to tell the homeowner that they are in control of who moves into their house. I thought that the point was to have a lease purchase that was assignable. If that's the case then I can assign it to whomever I want without the permission of the homeowner. So they would not be in control of who moves into their house. Am i missing something?

[Jason (AL) 1]

Hey Stephen,

 

They're called cooperative assignments for a reason.

You're going to do your best to get a well, qualified tenant in place.

You bring said tenant to your seller for the seller's approval.

 

If you've done your job (bringing them someone that's going to pay

a premium rent, take care of all the repairs & maintenance, and purchase at the end

of the lease), then there shouldn't be any reason for them to turn the

tenant/buyer down.

 

It is, after all, still the seller's house.

No need to put someone in there that's not going

to be in favor of the owner.

 

Actually, though, you're in control of who goes

in the home. Just let the seller feel like they are

and have the final say so.

[scntaxpro 0]

Hey Stephen,

 

They're called cooperative assignments for a reason.

You're going to do your best to get a well, qualified tenant in place.

You bring said tenant to your seller for the seller's approval.

 

If you've done your job (bringing them someone that's going to pay

a premium rent, take care of all the repairs & maintenance, and purchase at the end

of the lease), then there shouldn't be any reason for them to turn the

tenant/buyer down.

 

It is, after all, still the seller's house.

No need to put someone in there that's not going

to be in favor of the owner.

 

Actually, though, you're in control of who goes

in the home. Just let the seller feel like they are

and have the final say so.

 

what if it isn't a CA? what if i sign a Lease with an option to buy with the following terms:

 

Purchase price: $150k

Rent: $1,500

Term: 24 months

 

assuming the lease is assignable i can then go find whoever i want to assign it to can't I?

[MichaelC 160]

Stephen, my answer about the homeowner being in control was specific to CA's. However, if you are doing a sandwich lease, then you are the one calling the shots. The agreements puts you in control and requires no further input from the homeowner. You are their tenant and that should be their area of concern.

[scntaxpro 0]

Stephen, my answer about the homeowner being in control was specific to CA's. However, if you are doing a sandwich lease, then you are the one calling the shots. The agreements puts you in control and requires no further input from the homeowner. You are their tenant and that should be their area of concern.

 

 

So I don't have to tell the homeowner what my plans are if I plan on doing a sandwich lease?

[MichaelC 160]

Stephen, my answer about the homeowner being in control was specific to CA's. However, if you are doing a sandwich lease, then you are the one calling the shots. The agreements puts you in control and requires no further input from the homeowner. You are their tenant and that should be their area of concern.

 

 

So I don't have to tell the homeowner what my plans are if I plan on doing a sandwich lease?

Of course you have to tell them. What do you think any homeowner will say when you show up with an agreement that gives you the right to do just that, and up until then they had no idea you weren't the party moving in to their house? The deal is dead, you're thrown out on the street, and you have nothing but frustration and lost time for your troubles.

I was not suggesting you try and pull a fast one by being deceitful with the homeowner. Be honest from the start. And if a sandwich lease is fine by them, again, their concern needs to be their tenant, which is you.