Investors - How to find Lease Option Deals
So you have figured out that being a real estate investor means you need to do something a little different from asking a Realtor to find you a great deal on an investment property then go to the bank and ask for a loan. You think Lease Option investing is right for you. So where do you start? For purposes of this article, I'm assuming that you, the investor, already have your agreements in place that will allow you to sign up the deal when you find it.
The first thing to understand is that generally in order to find a seller willing to sell you their home on a lease with an option to buy, you will need to establish situation and motivation. For example, the situation may be that the seller has a job transfer out of state. That in itself is not enough for a seller to say yes to an investor wanting a lease option deal. Now the motivation may be that the seller is moving in 2 weeks and can't afford 2 house payments. Now the situation combined with motivation creates an excellent opportunity for an investor to be able to enter into a lease option agreement with the seller.
How to find sellers with both situation and motivation
Craigslist and your newspaper are always good places to start. Always look for words in the advertisement that hints to you that there may be a situation that exists that would cause the seller to be motivated. Many times the sellers will tell you up front that they are a motivated seller. Also consider looking in the "for rent" section of the newspaper as well. If you are in a market where it is a little more difficult to rent, the owner just may be in a motivated situation that could work out in your favor. Another excellent source of leads for motivated sellers is through the use of signs. If a seller calls you from a corrugated plastic sign, then they are generally exploring avenues other than the standard For Sale By Owner (FSBO) or listing it with a realtor.
Realtors can be your best friend and also your worst enemy when it comes to lease option investing in real estate. It takes some training, but if you can find a good realtor, they will understand that they simply can not list every house they run across. Especially considering the current economic conditions, sellers may not have the money or equity to even consider listing their home with a realtor and paying the commissions. In those cases, a smart realtor would be happy to refer them to you. In certain circumstances they can accept referral fees, but in addition they are developing a relationship with an investor that may be selling property in the future. On the flip side of that coin, realtors generally think inside of the box when it comes to selling real estate, so the indoctrination is important when working with them.
Last, but certainly not least, consider direct mailings. Focus on vacant houses, non-owner occupied houses, landlords, Newlyweds, and possibly people going into foreclosure, although generally foreclosure investing is a bit different from Lease Option investing. You can find non-owner occupied houses generally by checking your county assessor's website. If the mailing address is different from the property address, then more than likely it is not owner occupied.
Once the investing ball is rolling, you will begin to have calls coming into you from word of mouth, and there is nothing better than that! When you have some investment properties, please remember to visit www.landlordtechnology.com to screen your tenants, advertise your property, and collect your rent online FAST!
Brandon Gadish
CEO - Landlord Technology
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