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Hi all,

 

New here.. Just had some questions about getting my first l/o deal under my belt... I believe I have most the pieces..but how do I actually get paid?

 

Say I have all contracts signed with buyer and seller, do I have to call a title company? attorney? Whats the actual process for closing on the deal? Does the buyer pay me the downpayment directly or does it go into some kind of escrow? If it goes to escrow, when do I actually get my check? I'm a little fuzzy on this part. I've started marketing for both buyers and sellers about a week ago, and providing the numbers work out should have something signed soon. I just wanted to be prepared to move on it and know what the next steps are.

 

And can someone please explaine/tell me what rent credits are all about? I keep reading the term, just not sure how they're involved. Any help would be greatly appreaciated!

 

Thanks in advance!

 

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It depends on the type of deal your doing. If it's a cooperative assignment, then you are paid upfront when you have found a t/b and he pays his assignment fee/option money to you. When that occurs, you are out of the deal entirely and have no further legal or financial interest in it, and if and when the closing takes place is out of your hands.

If you're doing a sandwich lease then it can become a bit more involved. You would collect option money upfront, rent money each month as would any landlord, and potentially back end profit when the option is exercised. So, what type of deal are we looking at?

Rent credits are a percentage of the rent, (negotiable), that applies to the purchase price of the house when the option is exercised. For example, if the rent credits over a one year lease totaled $8K, and the purchase price of the house was $200K, the purchase price would then be reduced to $192K. That's the easiest way to explain it.

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Hi guys! Thanks for the input! It's exactly what I needed!

 

I believe I'm going to stick with CA's for the moment as Im not looking to be a landlord right away..

 

Maybe after I get some deals under my belt, and build up some cash reserves.

 

Thanks for the help!

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