How do you find lease to own deals?
Sacramento, CA · Member since 2013 · 10 posts · 0 votes
I have recently read quite a few article on this site and others about using lease to own contracts as a vehicle to get started. My issue though, is that they come from the perspective of investors who have been doing this awhile and have testimonials at there disposal to build their case. How would I, a brand new investor capitalize in this niche.
Finding Lease To Own Deals
1. Go to http://www.Neighborhoodscout.com You want the best school districts.
Plug in your zip code. Then look for the best school districts. THAT is your best product to sell.
Marketing - Prospecting
A. Listed Houses w Agents - See F.
B. Listings that have expired (Use MLS, get a Realtor or Get a License)
C. FSBOs - Go see them and walk through the house.
D. Landlords - Go see them and walk through the house.
E. We Buy Houses people - See them at a coffee shop, tell them you want to pay them for leads that can not not do anything with, offer $250 a lead. "We Buy No Equity Leads" They need to set the appointment for you to get the money.
F. Flyer to Agents. We want your Stale Listings! You can get the commission when they move to another house AND $500 for the Tenant Buyer that moves in.
G. Signs - We Will Lease Option Your House in 7 days! xxx-xxxx
H. Sign on your Car, similar to G. We Lease and Buy Houses xxx-xxxx
There are more marketing, like direct mail, flood an area w yellow letters and post cards, once every 2 weeks for 8 runs if you have the capital.
I find walking through FSBOS, FRBOs, Expireds and Listeds are the fastest ways to get houses. Direct Mail takes a while and needs frequency (e.g. one 5000 run is less effective than 8 x 500 runs)
Selling Rent to Own
You need to show the Owner that the costs to sell will net them 80 - 85% of appraisal. Agents Commission, Closing Costs, Sellers Concessions, Price Reductions, Vacant Holding Costs, Clean up to Sell, not to Rent, Repairs to Sell, not to Rent.
Then comparing that with Lease to Own, they can rent out for PITI (if rent is less than PITI, then add an option payment monthly.)
Hope this list helps your Lease To Own Business!
Tony
For you as a new investor I recommend you put at least 3 arrows in your quiver, or tools in your tool box. Most sellers that will do a lease option really want to sell but can't find a buyer at their price.
Step one is to find an owner who wants to sell but can't. first get him to accept and acknowledge his problem and then suggest a solution. If you can solve his problem now and he is really motivated your not going to have to prove yourself with a background check.
When I started I had just turned 16 and didn't look 16, so I thought maybe I should just forget it but a week later I had put together my 19 year old brothers and I's first deal and he didn't look 19 either, and back then you needed to be 21 but he was married and could legally contract. Solving the problem of the seller was the key and selling the seller the cure was the thing they wanted to buy. I remember a widow that was our 4th deal telling me when the deal was over she couldn't believe it when I showed up at her door but I was offering her a solution and then she told me she had two other properties to sell so she could get on with her life and asked us to help her on those.
A straight option to control a property is one tool, the lease option for you or handing it back to the seller is another tool, sometimes you let them join you in the deal and that is a tool. There are others you will come across, start a binder with notes on different tools/strategies and review it each time you talk to a seller. I did that with some sellers saying what do you think about these choices, do you think any of them will work for you? Just the fact that I knew of these options gave me some credibility.I said here are some things that worked to solve a problem for other owners, maybe one of these will work for you and I used the binder.
Tory,
If you really want to be the best in the field, learn all you can about lease option. Loral Langemeier claims that she was the top Lease Option person in the country for a time, she may still be, but there are others in your local REIA who can help you too. Be the best.
Jack
Finding Lease To Own Deals
1. Go to http://www.Neighborhoodscout.com You want the best school districts.
Plug in your zip code. Then look for the best school districts. THAT is your best product to sell.
Marketing - Prospecting
A. Listed Houses w Agents - See F.
B. Listings that have expired (Use MLS, get a Realtor or Get a License)
C. FSBOs - Go see them and walk through the house.
D. Landlords - Go see them and walk through the house.
E. We Buy Houses people - See them at a coffee shop, tell them you want to pay them for leads that can not not do anything with, offer $250 a lead. "We Buy No Equity Leads" They need to set the appointment for you to get the money.
F. Flyer to Agents. We want your Stale Listings! You can get the commission when they move to another house AND $500 for the Tenant Buyer that moves in.
G. Signs - We Will Lease Option Your House in 7 days! xxx-xxxx
H. Sign on your Car, similar to G. We Lease and Buy Houses xxx-xxxx
There are more marketing, like direct mail, flood an area w yellow letters and post cards, once every 2 weeks for 8 runs if you have the capital.
I find walking through FSBOS, FRBOs, Expireds and Listeds are the fastest ways to get houses. Direct Mail takes a while and needs frequency (e.g. one 5000 run is less effective than 8 x 500 runs)
Selling Rent to Own
You need to show the Owner that the costs to sell will net them 80 - 85% of appraisal. Agents Commission, Closing Costs, Sellers Concessions, Price Reductions, Vacant Holding Costs, Clean up to Sell, not to Rent, Repairs to Sell, not to Rent.
Then comparing that with Lease to Own, they can rent out for PITI (if rent is less than PITI, then add an option payment monthly.)
Hope this list helps your Lease To Own Business!