Real Estate Investing Basics

9 Crucial Items That Should Be On Your Lease Option Checklist

193 Articles Written

One of the 6,127 reasons that I'm single is because I can't stand high maintenance women (this one's voluntary, so two out of 6,127 ain't bad…I'll get to the second voluntary reason in a minute). Anyways, right now I'm working on a pretty house wholesale deal (wholesaling a house subject-to) and the seller is crazy high maintenance. This guy calls me multiple times a day… "Hi Jason, this is Mr. Seller, its 5:00, just wondering if you've found a buyer…Hi Jason it's 5:05, just wondering, Hi, Jason it's 5:07…" This guy is also a talker which is why I have my assistant return the calls and handle almost everything. If you don't have an assistant I would get one ASAP. I got my first assistant before I could even afford one and it was well worth it. And when I say assistant, I mean virtual assistant. My latest assistant lives in Wisconsin and has been with me for almost two years. I have her make all my calls and she handles almost everything for me. Remember, us investors need to focus on high dollar activities, not making phone calls. (By the way, I found a buyer for this wholesale sub-2, and at closing I will be getting a nice $9,997 pay day).

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Okay, the second reason I’m single is because I’m cheap. I just got back from a week in Florida. As I was packing for my trip, I stuffed all of my clothes in my old suitcase and I destroyed the zipper trying to get everything to fit (but I did get it closed). Then when I tried to unpack, I couldn’t get the zipper open. Being that I’m such a patient guy, I ended up “teaching the bag a lesson”, which means it ended up in a dumpster after I tore the zipper off and it was totally unusable. So, I needed a new piece of luggage and asked my friend to show me the closest Goodwill store. I ended up getting a beauty of a suitcase for $2.13. It’s a Samsonite hard shell. I’ve always wanted one of those hard shell pieces and $2.13 is right up my alley. I love Goodwill and the Salvation Army stores.

Alright folks, if you've been reading my posts you know that I'm going through a lease option deal from A-Z. Last week was the paperwork needed between you and the seller and this week I am going over the checklist you need to follow after you have the paperwork signed. Here it is:

  1. Make copies of all of the paperwork and either mail it to the seller or scan and email a copy to the seller.
  2. Make copies of all keys (so you have a key and so you can also put a key in the lock box on the house).
  3. Fax or mail the lender notification to the mortgage company so they send all of the coupons and mortgage info to your address.
  4. Run a credit check on the seller. Since lease options are more risky, you need to make sure the seller is not in a dangerous financial situation (if they are, do a subject-to).
  5. Fax the authorization to release form to the mortgage company and check the mortgage balance and the monthly payment amounts.
  6. Send a thank you gift and card to the seller. (I usually send a gift certificate to a restaurant).
  7. Go to the courthouse and record the option agreement. This should cost between $20.00-$50.00.
  8. Start marketing the property to find a tenant buyer. Place a sign in the front yard, run classified ads in the local paper and post ads on Craigslist.
  9. Set up your Excel spreadsheets, Word documents and folders for this property.

There you have it, my million dollar checklist. Next week, I will go over the paperwork for a tenant/buyer. I certainly hope that you are writing down all this information on lease options, because you are getting no B.S. info that took me thousands of dollars to perfect. Have a great week and remember to do at least one marketing activity every single day!

    Cedar City Real Estate
    Replied almost 12 years ago
    Man that would drive me nuts if someone was calling me every two seconds to ask the same question or some stupid question. I am surprised that you admitted that you are cheap. I would say that I am a deal hunter.
    Sherra Scott ~ Virtual Assistant
    Replied almost 12 years ago
    Thanks for giving virtual assistants a mention in your blog! Oh, and I don’t think looking for a great deal = cheap. Looking for a great deal is SMART.
    Replied almost 12 years ago
    Great deal is something that you purchased at good quality and good cost…
    Summit NJ Relocation
    Replied almost 12 years ago
    Nice list. it is amazing how few home sellers even think of half of that information. Though I have not done a subject too, or a lease option, I have done a number of foreclosures and turned them into nice flips.
    No Name
    Replied almost 12 years ago
    My family really love good deal things. Because you can buy a quality product for a small cost. Be wise! that’s what we need nowadays.