BiggerPockets

I would love to do sub2's but I don't have any cash reserves just yet.

Thats a good question!
I don't mind answering that.

I am very pro-active in making sure my L/O tenants buy the property. All of my L/O tenants are referrals from mtg brokers and buyers agents, so I already know what their situation is and why they are not getting qualified in the first place.

Having said that, they are already warmed up to what it's going to take for them to qualify from those 2 inbound leads. They are required from to enroll and continue to be involved in a credit repair program. Also with clearnow.com it reports their payments to show positive marks on their credit.

I'm not worried about being sued by either party simply b/c I'm a disclosing son of a b...... to everyone. The previous homeowner is glad they are not getting foreclosed and in the sub2 addendum I have them read it out loud while they sign it.

The L/O tenant understands that they are expected to purchase the home within a specific time period.

There is always risk or what if's in investing as we all know, I just try to reduce that risk from the beginning.

Worse case scenario I'll short the second and modify the first
I hope that was somewhat helpful

CONGRATULATIONS!

I think that is a great suggestion.

Sub2s I average 2-3 a month.

'08 I did 37 sub2's, by no means the highest numbers but I'm not complaining.

go to ahswarranty.com

they are a great investor tool, they provide extended home warranty coverage. They are my answer to not wanting Thieving property management companies.

They charge a few bucks every month (which I make the tenant pay for) and then if something breaks all you need to do is pay the pre-determine service fee (which I also make the tenant pay)

AHS will replace whatever they cannot repair free of charge. Can't beat that

All I can say is that the L/O sub2 is the perfect Buy/Sell strategy for today's market or any market for that matter.. An added bonus is that most sellers, especially in today's market are much more flexible to accomodate a longer Option term. I prefer 3-5yr term. Being a Investor/Buyer Agent I also do options for my buyer clients. It's a niche' for me because most realtors have a Retail/Put a sign in the yard and hope for the best mentality. They also want to get paid now. So I tell them that I will educate them a little and also tell them that I will pay them the seller side of the commission out the option money if they refer those clients to me.. They have no reason at that point not to talk to their seller about L/O. I also like the Lease Purchase contract (no-option) for Controlling Land in emerging market areas. Just go to your local city or online and take a look at their master plan. Concentrate on all the Infill land that's already pre zoned for multi units close to town. That's where your small developers are & will be looking to build. Their easy to work with and will also JV with you. Thanks for opening up this post. As you can tell I'm big on L/O and sub2. To create more wealth rollover all your IRA $ into a Solo 401K and use those monies to make the deal Tax Free. Let me know if I can help.

Matt Mathews
Mathews Associates LLc
Retirement Advisor
RE Investment Services

Nick,

Great idea to have RE agents/mortgage brokers bring you leads...what do you do for them in exchange for these leads?

This is my favorite section in these forums - I love reading these stories!

CONGRATULATIONS :)

Wow nick. You really go all out.

I have it revert back to the homeowner if noone buys in X amount of time, on a sandwich. I dont take the deed in delaware, because its too much out of my pocket @ a 3% transfer tax, and its your home, after the deed is recorded. Sandwiches are my favorite way to "take over homes", at this point. nice work.

I HATE coming out of pocket for transfer taxes. 3% is ridiculous, and its nothing more than the state standing there with their hand out, and doing absolutely nothing for their share. Grrr....