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DeeLight

Love the L/O Course & questions

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Hey All!

 

I am so happy to have gotten the L/O course! Sure enough I have some questions---many---but here's just a few:

 

1) I read somewhere here NOT to use the word sublet---right??

 

2) In Calif. there are many qualifications to be a "property manager". I think this could cause a snag in the ease of the conversation. And too I know that occasionally realtors call on ads---or I may call on one of their props. I ran into this years ago. They get super ticked off (to put it nicely) that

we are doing the job of a realtor without a license. How do you handle this? Maybe use a different word than property manager?

 

3) In marketing materials has anyone run into a problem with offering a referral fee?

 

4) What determines how long you want your rent term to be for your t/b. I've heard 1 yr, 3 yrs etc. Is there an advantage for me to have a longer period? Or is the point that I get a 3 yr from the seller and then give the t/b 1 yr at a time? What percentage of them squawk at the additional option money

required to extend their lease for another year? Do you just kiss them goodbye if they do?

 

I will not always be this ocd : !!

 

Thanks!

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MC is the guy to get you started and address the initial questions...but I'll toss a few things out here.....

 

1st, before your brain goes into overload, realize there are 3 different strategies MC discusses in his manual.

CA--cooperative assignment

SLO-- sandwich lease option

straight option---just an option to tie up the property essentially...

 

The CA is what you want to focus on first, as it's the easiest and safest way to get started. So...focus only on the CA at first and the structure and flow of the CA.

With a CA, there is no subletting. You are not a property manager or acting as one.

 

I would never put anything about a referral fee in marketing material, as it's not needed, and just murks the water. (I'll pay an agent a referral fee, but I'm not marketing to agents)

 

Focus on a 1-2 year CA.

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In addition to what John wrote, let me toss my two cents into the pot. . .

 

1) sublet is a scary word to most every homeowner. Avoid saying it. They envision a tenant-from-hell run amok.

 

2) most states have the same requirement. To be a property manager you need to be a licensed Agent. So, yeah, we are walking a fine line when we describe ourselves as a property manager or having a property management company. If it makes you jittery, don't say that. Go with something else that is in your comfort zone. That said, in the real world when I am speaking with a homeowner, telling them I own a "property management company that specializes in lease purchasing" has never caused the Real Estate Police to come a-knockin'. I sleep well at night. . .but that could be my nightly scotch and quaalude cocktail. :wacko:

 

3) I suppose that depends who you are offering that referral fee to. Realtors, mortgage brokers are a no-no. But if you're offering a fee to a homeowner for turning you on to a friend who is trying to do something with their house, I can't imagine those damn Real Estate Police will come at 3:00AM to question you. :P

 

4) If you are doing a sandwich lease, you want as long a term as possible between you and the homeowner and then a one year deal between yourself and your t/b. When doing a CA, they are usually one year long, but if the homeowner is open to a longer term, so much the better. Most tenant/buyers want more time, so a longer term deal is an easier property to fill. . .usually.

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Thank You Michael & John,

 

Well advised! I am starting my second read of the manual. I think the thing that makes me a skitsy is knowing when to use one type l/o over the other. but it may get clearer after I read the manual 2-4 times. :blush: My main talent is people---rarely ever meet a stranger---if I do tho it's cuz they WANT to be a stranger. The financing part is something I will learn as I go along.

 

And then I know that you are here for me to ask questions before I get myself all twisted up :P

 

yum, scotch! I'll treat myself after my 1st deal.

 

I found it interesting that I found 3 postings on CL last night wanting l/o's. I'll chat with them and see what's up (thank you Michael). I'll keep you informed.

Has anyone here just happened to find a buyer 1st and then found a prop? It seems like it could be a bit more challenging. But then if I smell $2k or thereabouts waiting for me, nothing seems too hard. :D

 

Many thanks !

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I don't put too much effort into looking for a specific property for a prospective t/b. I quickly found out that they began to think of me as their personal real estate bird dog. No matter what I would find it was never good enough. Lots of wasted time and frustration, little cash for my efforts.

Now, if a prospective t/b tells me they want a property, I tell them to scour the marketplace and when they find a property that suits their needs to let me know and I will put together the deal for them. It's rare that I ever hear from them again. Lots of tire kickers out there, Mel.

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I agree don't use the word sublet just because of the negatives attached to it. However in California you are legally allowed to master lease and thus lease or technily sub-lease with out a real estate license because you are not acting as a property manager for the owner, you are the master tenant and can sublet if you want to, you are acting on your own behalf as a principle, not as a agent of the owner. You are dealing with your rights not the owners rights so to speak.

 

I have suggested to a few smaller property management companies to give up what they are doing and just master lease because just the tax savings make it worth while. and they did.

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