Have you ever wondered how someone launches a business (any kind of business for that matter) from nothing within 90 days? All the while they are earning profits and cash flow by around the end of the 3 month mark.
Sounds too good to be true right?
Well, it's not because I am going to show you in the next few minutes how to do the following:
Launch a business (any kind of business) from nothing at all
Stay busy doing the right activities consistently on a daily basis
Practically guarantying that you amass profits on a consistent monthly basis
Create recurring cash flow within a 90 day period
I don't know about you, but I started off cold calling to drum up new business. The alternatives
were to go door knocking, driving randomly around town to meet new people, or connecting with
new people via friends and family.
Personally, I hated everyone of these options with a passion. Yes, I made cold calls, hundreds and
thousands of them over several years. I made cold calls though and made it work because it was the
lesser of the other two evils. I got good results with my cold calling. The problem was that I was
growing to hate it even more though. It both took a lot time and energy out of each of my days. I felt
like it was consuming more and more of my life and becoming more of a waste of time as well. Do
you know that feeling? I had this growing feeling of resentment and time being wasted because I
So...How does one do it and...How does one do it - 100% online?
There are two main ingredients that factor in for the recipe:
You have to decide that you are going to, "keep the main thing - the main thing." You have to expose your business to a minimum of 10 new targeted leads each and everyday, if you are full time in your business. I refer to this set of 10 new leads each day as your "10-in-play."
You have to plan out your sales and marketing campaigns 90 days in advance. Again...I refer to this as "Your 90 Day Run." This is where you put "your head down and your blinders on" for 90 days, ignore all distractions, and...follow the process laid out in the previous step above for 90 days...without skipping a beat.
Think about this...
Let's say you worked 6 days out of the week, and you contacted a minimum of 10 new targeted leads
each day, that would be 240 new prospects per month. After 90 days, that's 720 new, targeted leads!
Let's not forget though, that you will need to have a "follow up system" throughout your 90 day run.
This is because the "fortune" is in the follow up.
Most people will not buy whatever you are selling the very first time they hear about it from you,
because they do not yet:
Know
Like
Trust you
People buy from people. Plain and simple.
So, it's critically important that you have both sales and marketing automation along with human
touch otherwise you will struggle making sales.
We use a CRM (Customer Relationship Management tool) called Aweber to perform the automated
follow up tasks we implement with our prospects, so we can:
Build Trust
Build Relationships
Inform & educate our prospects
Find out which prospects are genuinely interested in our program and connect with them on the phone
Identifying where our target market "hangs out" so we always have a "predictable and well stocked pond to fish in",allowing us to know we can always go back to this "pond" and fish whenever we would like more leads.
We run our prospects through sales and marketing funnels that educate our prospects, all while building relationships with them, and ask them for the sale only once we provide at least $10 worth of value for every $1 we charge for our help.
This process above allows us to avoid the temptation of:
Begging, pleading and chasing our "Kings, Queens, Jacks, and Jokers," in an attempt to convince them to change and become Aces.
Wasting time with "Tire Kickers" who can't say the word "NO" when they are not interested in what we do, causing us to waste our time following up with them to see if they are in fact Aces.
Your probably asking yourself "Dan, How do I know when I have come across a true Ace and not a
Jack or a Queen"?
Easy.
You ask the prospect to do the things that will either prove your prospect to an Ace, or prove them to
be a Jack or a Queen.
This is what I personally ask of my prospects:
Visit my blog (where you are right now), so they can learn online marketing and sales, and then they can decide if they want to...
Opt into my website, check out our sales and marketing blueprint over a 4 part video series, then decide if they can see themselves working with us if they are wholesale real estate investors. If they are property owners, I ask them to visit a different page of my website to see if they would like to get free and fast marketing for their property. And...If they want to buy one of our nationwide, "Rent to Own" homes, I send them to my web address to see our current inventory of properties.
For those of you who do not yet have automated systems for following up with their prospects, I
highly suggest the following follow up sequence:
First follow up call: within 24 hrs of the first contact with your prospect (leave a message)
Second follow up call: within 3 days of the first follow up call (leave a message)
Third follow up call: within 7 days of the last follow up call (leave a message)
Fourth follow up call: within 10 days of the last follow up call ( leave the final message)
If the prospect has not called me back, visit my website, and has more reasons and excuses on why
they have not been able to do one of the tasks that I have asked them to do, rather than reasons to do
these simple tasks, they now told me they are Jack, Queen or Joker.
I sleep well at night knowing that I no longer have to guess whether or not someone fits into what we
do. They have made it crystal clear for me that I no longer have to waste anymore of my time.
Making 4 follow up calls may seem like a lot of manual labor, and honestly, it can be after a while.
So, I recommend that after you start to understand what you are selling and how to effectively sell it,
you upgrade your marketing arsenal to include and have more automation tools. This will allow your
work load to decrease, all the while your income increases.
We use tools such as auto-responders to do all the heavy
lifting and follow up with prospects for us.
Auto-responder email messages contain our professionally written ad copy sales messages and are
sent out at a predetermined time with a predetermined message so as to "speak" to various types of
prospects.
Our affiliates do not have to write their own, because we simply give these pre-written messages
and ad creatives to those that want them. Check out our auto-responder messages here by watching
the first video, then entering in your name and email address to start receiving these automated
messages.
My hope is that you have enjoyed learning how to identify prospects that will buy from you, and
take the next step and grab my free, 7 day video series that shows you how to automate 90% of your
real estate investing without using your own cash or credit, and even if you have zero experience by
Two of the best and easiest methods that allow you to invest in real estate without using any of your
own cash or credit is with Lease Options (A.K.A "Rent to Own") and "Sandwich" Lease Options.
These two methods are not only my favorites but they are also great ways for beginner wholesale
real estate investors to get started as well. The reason these are the best ways to get started is because
when you do them correctly and the way we do them, they don't require risking any of your own
cash or credit.
In addition, when you follow our instructions step by step, you will not:
Have to ever drive around the city and look for vacant properties
Wait months and months to get approval from banks for your deals
Waste time with "tire kickers" who are not really interested in working with you in the first place
Insult and offend your sellers with low ball offers
Deal with rejection on a daily basis, avoiding frustration with people who do not respect you
Plus, much much more.
What Is a Lease Option Anyhow?
It's a way for a buyer with bad credit, a small down payment and/or not enough time on their job to gain the benefits of controlling a property having yet qualified to buy it.
Allows a portion of the monthly rents to be applied towards the future purchase of the property, if the buyer (tenant buyer) decides to exercise their option to buy the home.
A lease with the "Option" to buy the home in the future or not to buy it.
Buys time (1-3 yrs on average) for the buyer to fix their credit, save up for their full down payment and gain more time on their job in exchange for giving the seller a higher than market price.
The wholesale investor does not need to have an expensive hard money loan, does not need to go through a bank's strict qualifying process, and since the Option rights are "personal property" and not "real property," the wholesale investor can even assign the Option rights without using a Title company.
Lease Option Assignment Deal Example:
With this example, we are going to lock up a property for $100,000. You will then turn around and
resell the purchase price at a higher amount of $103,000 for demonstration. Your "end" tenant buyer
is going to give you the $3,000 so that you will now be able to assign the Option rights over to them.
They will now have the option to buy or not to buy.
The seller is pleased because they will get their full asking price of $100,000 and did not have to pay
the Realtor commission of 6% and $6,000, plus they have a better tenant than they would compared
to renting the home.
This strategy will also work even if the seller has no equity in the property. Even if you are unable to
negotiate a lower purchase price, the buyer typically is willing to pay a premium for their home if:
They don't have to deal with a bank
They don't have to rent anymore
A portion of their rent will go towards reducing the purchase price
They will the feel and control of home ownership without qualifying from the start
If you are a Realtor by chance, this is a WONDEFUL strategy for you to implement when dealing
with FSBOs. Instead of representing the homeowners that want to sell their properties (For Sale By
Owner), you can instead act solely as a Principal in the transaction representing yourself, instead of
A Sandwich lease Option is very similar to a Lease Option, but instead it allows the wholesale real estate investor to stay in the mix of the transaction, allowing them to profit in more ways than one. When structuring the transaction in this manner as we do, you still avoid the usual risks and cash outlay.
When using this exit strategy, an investor can earn profits upfront in the form of assignment fees (typically $3,000 - $25,000), during the lease term when reselling the rental price at a slightly higher amount or negotiating that the seller will receive a smaller amount, allowing the investor to keep the difference.
"Sandwich" Lease Option Deal Example:
Let's say for example that the seller wants to sell their property to you for $100,000 with rent at
$1,000 per month, and for a 3 year term. You then turn around and resell the pricing and terms to
your "end" tenant buyer and keep the difference. In this illustration, the easy way to structure this
deal would be to resell your Option to buy this home for $103,000 in year one (keeping the 3K
difference), resell the rent for $1,200 per month (keeping the $200 per month difference as your
passive cashflow), then for years 2 and 3, you might make the pricing as follows: $106,000 and
$109,000 respectively (you keep the additional 3K - 6K depending on when the "end" tenant buyer
buys.
This strategy works even if the seller has no equity, and even if you are unable to negotiate a lower
purchase price, because the buyer (from experience) is typically willing to pay a premium for their
home for the following reasons:
They don't have to deal with a bank
They don't have to rent anymore
A portion of their rent will go towards reducing the purchase price
They don't have to have a credit check
They will have the feel and control of home ownership without qualifying from the start
Where Do You Find the "End" Tenant Buyers?
When the pricing is right for a property, finding a tenant buyer is very easy. In fact, if the property is
not selling, it means that the price is too high. Some sellers will argue this point with you naturally
because they feel their home is worth much more than an appraisal or Realtor is saying it's worth.
The truth is, when a property owner is getting a lot of interest on a property, even tons of showings,
but no offers - it is because of the price. The price is always the reason, assuming that all the
marketing was done correctly and all other basic variables are correctly in place.
Many Wholesale real estate investors know that they can advertise for buyers on free sites such as:
allowing them to blast out a single message to all their buyers in a given area, price range, and other
criteria, and have the home sold quickly.
We have built such a list for our own business so we could sell properties quickly with our buyers list
when the property is priced correctly. Pricing properties correctly has allowed us to sell properties within 6 days, start to finish, having the tenant buyer in place within 24 hrs. In fact, we purposely
create and "Auction" like effect that allows us to be picky about which buyer we want to go with
instead of haggling, begging, and pleading the buyer to buy.
It is my hope that you have enjoyed this blog post, causing you to take the next step in your
wholesaling real estate career by learning more about how to get more motivated sellers, more
closings without banks, and more profits while automating 90% of your work (even if your a
Could a real estate professional get 1 out of 3 "For Sale By Owners" to list with them without having
to charge any commissions or fees? The answer is a resounding "Yes"!
Let's look at the facts:
FSBO's do not want to pay you one red cent in commissions or fees if they can help it.
They don't have any equity with which they can pay you commissions
They do have equity in their property but they don't want to give it to you
They feel that they can do the same job you do, equally or better
They are underwater and would rather sit and wait for the market to correct itself etc.
What if though you could still help these FSBO's by giving them the following:
Provide Huge Value
Find great buyers that are more than happy to pay the full asking price
Do all of this absolutely free of charge
All sounds too good to be true, right?
Well, it's not, and you will see why in a second. I am going to give you straight forward logic that is
easy to consume that will prove that you CAN help FSBOs. Plus...you will do all this without
charging them a 3-6% commission, find them ready and willing buyers, and do it all within 7-14
days, from beginning to end.
Step 1 - Think Like An Investor, Not a Realtor
I need you to take off your Realtor cap for a minute, and put on your real estate investor cap on instead. Now, rather than thinking about commissions or fees, think about profits.
Instead of representing the FSBO seller, work with them hand in hand and along side of them while you both profit.
Act as a Principle and represent only yourself. You are not reprsenting the FSBO nor the Buyer
Find out what the FSBO sellers ideal purchase price (within reason of course) and give it to them.
Build your "profits" (not commissions or fees) on top of that purchase price, creating the new resale purchase price that you will offer to "tenant buyers" instead of conventional buyers.
Step 2 - Knowing Your Numbers. How to Structure the Deal Accordingly
I want to give you an example of how the numbers here would play out:
For simplicity, let's say the FSBO wants $100,000 for the property. Normally, you as a realtor would
charge them up to 6% for you and the selling agent, correct? You would get your 3% cut and so
would the other agent. But instead, what if you could add your 3% to the total purchase price of the
property instead, never having to charge the seller a dime. Now, what if you made the new purchase
price of the property $103,000 and the buyer gives you that $3,000 for assigning a contract over to
them, all while the FSBO gets their $100,000?
Is this realistic and a viable option?
It is when you structure the deal on what is called a, "Lease with the Option to buy" (Lease Option or Rent to Own), and bring the FSBO a tenant buyer who will lease the home for a few years (normally
1-3 yrs) all while working on their credit issues, saving up for the down payment, and/or gain more
time on their job.
In this simplified scenario, all parties win due to the following reasons:
The FSBO gets to find a tenant buyer for their home who is more than willing to pay their full asking price for the property all while they keep 100% of their equity.
The tenant buyer gets to avoid wasting all their money on rent and allocate a significant amount of their monthly rents towards their future should they decide to exercise their option rights.
And You? You're going to get the same amount of money would have received in commissions, but instead now in profits.
Now, lets answer the obvious question that is begging to be answered: How many of these FSBO
deals that you would have dismissed and never listed, can now be listed?
Tons of them!
" But wait, Daniel!...Not so fast! This all sounds to good to be true."
You might still be a little skeptical, asking yourself, "what if the FSBO wants part of the option fee
as well?"
This might happen from time to time, and while most FSBOs will be pleased with getting their full
asking price while not having to pay any commissions should the tenant buyer exercise their Option,
they may still be concerned that the tenant buyer may not pay their rent and they may have to evict.
I do not blame them one bit.
While this is a possibility, tenant buyers who's ultimate goal is to own the home is by far a lot less
likely to default on the rent since they just put up a large "non" refundable deposit (the Option fee),
so they have more "skin in the game" compared to your regular tenants.
Think about this...
Do you wash your rental car when you have one? No! But, you do wash the car you own or will
own, correct?
For arguments sake, let's say the FSBO wants half the option fee.
Is this still worth doing? Yes, 100%.
If you as a Realtor or other real estate professional could do the kinds of deals each week or every
two weeks, without having to deal with the hassle of working with banks, wouldn't you give up half
the Option fee to do these kinds of deals on a consistent basis?
I would. And I do.
I actually like and appreciate the fact that the FSBO we're working with is getting money to protect
themselves just in case. It makes me and them sleep easier at night knowing that they have some
financial backing if the tenant buyer fails to pay on time...or flakes all together. Remember
this...greedy investors will always lose in the long term. Make great deals while avoid being greedy,
and you will be around for the long haul.
Step 3 - Start Contacting FSBOs Today and Get More Deals.
Remember: 1 Out-of-3 Say, "YES" to This Offer!
Finding FSBOs is not hard at all either.
Your can find them quickly and easily on following sites such as:
Craigslist
FSBO.com
ForSaleByOwner.com
Owners.com
Plus, many more!
You can also go to SimilarSites.com and type in one of the sites above and hit enter. You will find
similar sites and results, allowing you to find more FSBOs. Again, finding FSBOs is not hard at all.
And...when you propose this type of structured deal, it's pretty simple to get daily deals. Let the
FSBOs know right away upfront that they can put their wallets away, and that your're not going to
ask them to list their property on the MLS for a fee. In fact, your not going to charge them one red
cent...ever...because your going to get paid by the tenant buyer once you successfully find the FSBO
a tenant buyer that they have met, like, trust, and have verified they can qualify to buy their house in
a few years.
If you find that your starting to get lots and lots of FSBOs under contract, and you need a resource
that can provide you with nationwide tenant buyers, please keep me in mind. We have over 4,000
tenant buyer subscribers and it grows everyday.
In fact you can CLICK HERE NOW to get a better idea for what we do, how we do it, and why we
have been successful at it.
Hope you enjoyed this strategy. I hope you start contacting FSBOs today, so you can make huge
Within a couple of minutes of furnishing all the necessary info, you will have a "all systems go"
sales letter for your real estate business. You can implement the following sales letter into your
current sales and marketing funnel, creating more buyers interested in working with you. Mail or
e-mail it out to build your buyers list, close more deals and save time figuring out what to write.
Dear {name},
As you can see I've attached a genuine looking Million Dollar Bill to the top of this letter.
Why have I done this?
Actually there are two reasons...
#1: What I have to tell you is extremely important and I wanted to be sure to get your attention.
#2: Since I help people {name of benefit get a $500,000 for as little as $300,000 or, get Million Dollar Homes for as little as $700,000} I thought these Million Dollar Bills were an especially appropriate eye-catcher.
My name is {John Sample}, and my FREE Home Discovery Analysis will help you decide on a home-style that is right for you, what you can afford, and what kind of home will fit your lifestyle now and in the future.
With your FREE Home Discovery Analysis you'll also get a personalized report that summarizes your most important interests in a new home. This will give you and I a model to work from making it much faster and easier for you to find a new home!
But that's not all...this report can be updated and changed at anytime and as many times as you want. So if you change your mind about something on your report we can create a new model to work from. A $225 value, yours FREE until {date}!
My FREE Home Discovery Analysis has helped many of my clients get a new home that they are proud of and without sacrificing their current lifestyle and spending their entire life savings... Here's what a few of my clients have to say:
{Testimonial}
{Testimonial}
{Testimonial}
You can get similar results from working with me, and I guarantee it!
Here's My Home Discovery $100 Guarantee... If after your FREE Home Discovery Analysis you decide to let me help you find a new home I guarantee to find you a home that you want and can afford within {3} months or I'll right you a check for $100.00, no questions asked!
Your Home Discovery Analysis is FREE, there is no obligation to work with me, and I will not bother you with any sales pressure. I don't work that way.
Call {xxx-xxxx} anytime between the hours of 8am - 6pm Monday through Friday to schedule your FREE Home Discovery Analysis, or use the return reply card that's enclosed.
Don't wait, call or send in your reply card now!
Sincerely,
{Your Name}
PS: Schedule your FREE Analysis by {date} and you will receive a FREE Report called, "Ten Ways To Instantly Increase The Value Of Your Home By As Much As 45%!"
Please Note: This mailing success relies on using a "grabber" (which is the million dollar bill).
A grabber is used to immediately grab your prospect's attention.
Why Am I Giving This Sales Letter Away for FREE?
My goal is that if you enjoy using this fill in the blank sales letter, allowing you to get more buyers and deals quicker, you will check out my following sales and marketing funnel:
Receive loads of buyers on autopilot to buy our properties, so we can sell within 7-14 days.
Receive 40+ motivated seller leads within minutes, so we always have deals to work on.
Qualifies (or disqualifies) leads that are not a fit for our business model, so we don't have to.
Follows up with our prospects via email via auto response email messages.
Allows us to work in states where we're NOT licensed, because we act as a Principal instead of as an agent, and so can you.
Helps us avoid having to hold time-wasting, "Open Houses," on Saturdays and Sundays.
Allows us to do help FSBOs that wouldn't list their home with a Realtor in a million years.. until now.
Allows us to work deals that have zero equity (and even under water) and can't afford to pay your commissions, so you as a Realtor can STILL help them.
Allows us to help buyers who can't qualify for a bank loan today - buy a house - TODAY.
Helps us avoid dealing with banks and their impossible loan qualifications, mean underwriters, and unrealistic appraisers, and now you can do the same.
Allows us to never do a showing of a property ever again, and instead get the seller to do it for us... and thank you for it. Now you can do it too!
You do this by adding 3% (or $6,000) to the purchase price for a total of $206,000.
The seller will get $200,000 (allow for 1.5-2% for closing costs, though who will ultimately pay them can be negotiated), plus their first month's rent and a non-refundable deposit equal to the rent amount. If you have to finance a portion of your $6K, do it to get the deal done at 10%.
Make the lease term for 1-3 years, with 3 years being the ideal term. This makes more sense to a would-be tenant-buyer, since they will be exchanging a higher purchase price for time to fix their credit, get more time on their job, and or save up for their full down payment required by the bank.
You collect the $6,000 (may be less if you need to make the deal work and give some of that amount to the seller - every deal I do is different, so this always varies).
The seller is happy, because she got all $200K, and didn't have to pay you a dime.
You're happy, because you didn't throw away a deal just because there was no equity to pay your commissions.
For Sale By Owners That Simply Don't Want to Pay You a Commission
This second situation can actually be handled just like the first one we discussed. The sellers in this
second scenario does not want to sell their property with you. This is not because they can't, but
rather because the very idea of paying you any kind of commission make them sick to their stomach.
What you can do then, is offer them the same exact deal previously described, and...Bingo! You got
another deal closed where the sellers and buyers are both in love with you and live happily ever after.
Obviously, there are more details to this, but this gives you an "aerial" view so you can begin to see
and understand how being creative can help you close a couple more deals a month that you may
have thrown away initially.
And...the best part is:
Closing deals in 7-14 days can now become a regular occurrence for you.
You can talk to and ask all your agent friends to send you all their deals that fit this criteria, allowing you to close more deals while doing less work.
There are no banks or underwriters to deal with at the start for you or the buyers, so more of your deals close each and every month.
And...when you really want to be awesome and show off to your friends, you will learn how to do all
I have been doing this online and works wonderfully.
Sellers don't have to do very much because all the "heavy lifting" is done all online and contractually by us.
Buyers love it, because they can get all the perks and benefits of owning a home before they can actually qualify, and you are a super star, because you solved a problem for both parties all while chilling out at home in your jammies.
If you have ever thought about buying a home(s) as "Rent to Own", I want to give you four questions
that you need to ask right away. These questions will give you the advantage over other people for the
following reasons:
They will save you time
They will save you money
Save you Headache and hassles
They won’t ask these questions for various reasons
Lastly,they simply don't know to ask these questions
Here are the 4 Questions:
1. How Will Your Company Help Me Find The Best Price On The Home
I Want Without Causing Me To Over extend myself?
Answer: We know and understand that most people worry about the price on a home when
committing to a huge purchase such as a home. Depending on your wants and needs the price tag
will vary considerably. Because of this, let's set up a time to talk right away. This will allow the time
for us to discuss all the key elements, details, and facts with you. Ensuring it goes smoothly, safely,
legally and that the monthly payments fit within your budget. My business partner and I will talk
with you personally to help you determine how much you can afford to spend, and then we will find
the right home for you that fits your needs and monthly budget. Were in the business to make sure
were getting the best deals for our tenant buyers across the country, making sure you don't pay too
much for your dream home.
2. How do I know the home will not be going into foreclosure while I'm the process of buying it,
only to lose the home and be evicted immediately after I buy?
Answer: Again, we understand that this is a huge commitment and can be very stressful. We want to
make sure we take our time and make sure you are happy before you sign any contracts which
includes allowing you to:
Speak with your personal accountant or financial adviser to ensure you're making a great financial decision before you purchase your "Rent-to-Own' home.
Speak with your attorney and have them help you review all contracts before you sign them.
Allow you to gainbank authorization, so you can ensure that each every monthly rent payment actually goes towards your rent payment each month.
Fully inspect the home before you buy it, so you know it's in great shape from the start.
Fully inspect Title and the current status of the mortgage, so you know that the seller is not delinquent.
Compared to some shady, so called "Rent to Own" companies, we don't use high pressure tactics or
sales gimmicks, allowing you to take the time to make up your mind and make an educated decision
before singing any contracts to buy your new home. In fact, you will only be meeting with the seller
themselves, so you don't have to worry about us trying to pressure you into buying a home that you
don't fully love.
3. How do I know what's available?
Answer: You will be able to check out our website and see the availability. You can also, schedule a
phone appointment with my business partner Russell de la Pena and I. We will give you the
information on the various home choices and options you have at your finger tips. Plus, how to find
the right home for your needs. And...if for whatever reason we don't have the home you want in our
inventory, we can help you find the right home. Again though...there will never be any pressure to
buy what you don't want.
However, before setting up an appointment, you must meet the following criteria:
You plan on buying in the next month or two.
You do not have a felonies on your record.
You have proof of funds to close.
You have at least $3,000 to put down for the Option fee, plus your first month's rent.
You want to buy, "Rent-to-Own" and not just rent a home.
Please do not set up a phone appointment with us, if you do not meet all the above guidelines,
because it will waste both of our time. The reason being is because sellers that we negotiate with
often require these minimums to even begin the negotiating process. Sellers have a fear that because
you have bad credit or not enough time at your job, you might at some point default on the rental
payment, and they will be stuck spending lots of time and money trying to get you out of the home.
In addition, some people stop paying rent and/or destroy the home at the same time.
We believe in giving people second chances, and you probably have to intention in destroying the
home or stopping payment, but please look at it from the stand point of the home owner.
They are taking on a huge risk as well by:
Allowing you to lease and buy the home without any credit checks from the start
They are allowing you to live in their most valuable possession, their home, until the day comes when you decide to exercise the option rights from us (if you decide to do so).
If this was your house that you were going to lease and sell, how would you feel? Probably the same as them, correct?
4. Does any of the rent and Option fee money apply towards the purchase price?
Answer: Yes, the option fee is applied to the purchase price of the home. Most often, the seller will
apply $100-$500 of the rental amount towards the purchase price as well. After all, this the whole
point of you buying the home this way to begin with right? Right.
Hey... If you like this way of investing in real estate (selling on a lease-Option),
we're looking for folks across the country that might want to invest with us
(without using any cash or credit - you don't even need a license).
Interested?
Enter Your Name and Email Address Below to Watch
My Sales Funnel In Action Now.... Absolutely FREE!
1. It doesn't cost you a dime to fill the property. That is what we do and we are paid by the tenant-
buyer.
2. You no longer have to lose your mortgage or property tax payment every month since you will
offset it with the monthly income.
3. You don't have to do maintenance on the property - the new tenant-buyer is responsible for repairs
up to $5,000.
4. You don't pay for utilities.
5. They cut their own grass and shovel their own snow.
6. They don't call you like regular tenants.
7. You get a 3 year lease rather than 1 year for most tenant-buyers.
8. You get a more stable tenant-buyer than a regular renter because the folks that move in see
themselves as owners rather than renters. Remember the old adage, "You don't wash a rental car."
Same goes for buyers vs. tenants of houses.
If the person walks away from the lease what becomes of their down payment?
It is non-refundable to the tenant-buyer. When they end their lease, we would be happy to help you
fill the property again - we have a very active and growing list of buyers.
Who is responsible for upkeep and maintenance on the home?
This is all the responsibility of the tenant-buyers.
Since the home has a mortgage are there any problems with leasing that would cause the "Due on sale" clause of the mortgage to be invoked by the lender?
No, a lender would see this as a lease, not a transfer of ownership.
Because it's a lease, does the person leasing the home get the homestead exemption or would it be
treated like a rental property, and if so, at what point would the taxes would go up without that
exemption.
It would be treated like a rental property so eventually the exemptions would be removed and the
taxes would go up.
But - you also get the benefits of owning rental property.
You will get several financial benefits from keeping your
property and selling it as a Lease-Option:
1. Depreciation on the property. This is a good thing. You can deduct 3.64% of the tax basis (27.5
years depreciation) of the improvement of the property against either active or passive income
(depending on how you are set up). On a $100k property, this would equal about $1k in real cash
savings on your taxes each year. (talk to your CPA for details about how this works).
2. Appreciation of the property. Over time, the value of the property goes up. We know it's been a
rough patch in the market these last few years, but the likelihood is that the values will eventually go
back up. This will make it possible for you to sell the property in the future and make a profit rather
than have the potential (in many cases) of actually having to come to closing with cash to sell it.
3. Buy down of the mortgage over time. Over time, the note will pay itself off. You may have years
before this happens, but every month a little bit of your payment goes toward the principle and you
will build equity.
4. Rents go up over time as a hedge against inflation. The thing we love best about our investment
property is that the rents go up. We know of no other investment that has an automatic hedge against
inflation like this. Most houses have 30 year fixed payments, but as rents go up, if you apply the
extra income to the mortgage each month, you will likely pay it off in 10-15 years because of the
increased cash flow.
There are also some negatives to consider:
1. Risk of vacancy. Over time, you will have vacancies. Each month the property is vacant, you lose
money. The beauty of working with us is that we have lots of tenant-buyers and can fill it very
quickly. The risk of selling it on the open market is often much higher than selling it through us with
a Lease-Option. Keeping it on the open market, you must pay the mortgage, utilities, taxes,
insurance, grass cutting, maintenance and wear and tear that comes from keeping a property vacant
(did you know that the plumbing will often deteriorate in a vacant house because of lack of use?).
2. Risk of damage from tenants. There is always going to be wear and tear on a house when someone
lives in it. When they move out, you will need to have it cleaned up before you sell it again. It's also
possible that someone will deliberately 'trash' your house. This is very rare and is covered by
insurance.
3. Management headaches. We hate managing property and make a point NEVER to talk to any of
my tenants. The biggest reason people say they hate real estate investing is because they manage
their own property. This, in our opinion just doesn't make sense. Let our tenant-buyer be responsible
for the repairs - the first $5,000, in fact.
4. Picking a bad buyer/tenant. This is another mistake most newbie investors make - they screw up
on tenant-buyer selection. That is why we put them through a qualification process that vastly
improves the tenant/buyer's success rate.
The downside is that taking on tenant buyers, in my opinion, is much smaller than the upside -
especially if the alternative is a vacant house. We know that in a good market, 33% of all properties
listed for sale on the MLS do NOT sell. Right now, that percentage is much higher. We also know
they will not sell for more than market value and that the cost to sell with a Realtor will run you
about 10% after commissions, closing costs, repairs, and negotiation. For many people who are close
to market value on their mortgage, this cost just isn't possible.
How do buyers get financing when it's time to exercise their Option?
They go to any conventional lender and apply for a loan. The reason they are buying "Rent To Buy"
right now is because they do not qualify for a conventional loan. Since 2007, conventional loans
have become much harder to qualify for - ask any mortgage broker. That is why so many properties
that are for sale by real estate brokers don't sell. Buyers just can't get loans without almost perfect
credit. Appraisals have also been a problem recently, so even if the Buyer qualifies, if the appraisal
doesn't come in, they won't be able to finance it.
Our goal is to help good, responsible people get into a home. People who will take care of it and treat
it like their own. We've had good luck finding just that over the years.
If the tenant-buyer exercises the Option, that's great and you make your money. If they don't, the
advantages of having someone pay your mortgage and buy a house for you are enormous.
We believe that selling the property as a lease-Option is the solution that is the least painful. In fact,
it may end up being the best financial decision you ever make.
I hope these answers give you a better idea of how this all works and helps you decide if it is for you
or not. Feel free to call us if you have additional questions. If you are ready to go, just fill out the
form RIGHT HERE , and we'll get started immediately. We'll blast out the details of your property
to our tenant-buyer-list and get it transferred to one of our tenant-buyers as soon as possible.
