First time positing on BP!!! I've Been a member for about a week or so, but been an observer for about a month... This place is like REI heaven! I have a contract Im getting ready to secure this coming weekend from a motivated seller and going to market the crap out of it and lease option it to a buyer... I know this is the kindergarten stage of REI but I do need anything for resources other than a lease-option contract, a real estate attorney to review the verbiage a title company to switch the names and a bank to put the money in: This will be my 1st deal and I feel like Im missing a lot more resources, not sure what though!
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
13y
Welcome @Larry Feacher II!
As Bill said, checking borrowability of the tenant buyer is important to success. A Credit Improvement FICO coach can access credit and put a plan together to raise FICO scores.
Larry, are you doing a Lease Option Assignment? I use a Letter of Intent that discloses many things to a prospective seller:
RE: Notice of Intent to enter into a Rental Agreement and Option to Purchase Agreement for the real property known as
_______________________________________________________________
To Property Owner:
Please be advised that the undersigned is interested into entering into a Rental Agreement and Option to Purchase Agreement. Please be advised that I am a real estate investor that intends to enter into the agreements contemplated for the purpose of investing in real estate as a going business concern. I now provide you with this Letter of Intent.
This letter is intended to summarize in the separately numbered paragraphs below the terms by which I desire to lease your property located at _______________________________________________________ (the "Property"). For purposes of identification, ________________________________________ (husband and wife) (whoever is on the deed) shall be referred to herein as "Landlord", and XYZ PROPERTY GROUP LLC shall be referred to herein as "Tenant".
1. Property to be Rented.
2. Term.
3. Rental Rate.
4. Security Deposit.
5. Possession Date.
6. Option.
7. Option Money.
8. Representations, Warranties, Covenants, and Indemnification.
9. Legal Effect.
I hope that framework helps you!
I bring the signed LOI to the attorney, the attorney drafts the agreements, the seller signs, then I market for the Tenant Buyer.
I do not market for the tenant buyer until I have a legal right to the property, that is 1) a signed lease and 2) a signed option in my LLCs name.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Welcome Larry! I suggest you take your buyer to a mortgage loan officer and have them see I they will qualify for a loan, many buyers will ay they can't, but that's not the real reason you go, it's to find out what their issues are and find out how to cure the problem and when they should be able to qualify, then you will be ready to do your L/O. Otherwise you may find problems ahead. Search here as to what problems need to be addressed. Good Luck!
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
13y
Welcome @Larry Feacher II!
As Bill said, checking borrowability of the tenant buyer is important to success. A Credit Improvement FICO coach can access credit and put a plan together to raise FICO scores.
Larry, are you doing a Lease Option Assignment? I use a Letter of Intent that discloses many things to a prospective seller:
RE: Notice of Intent to enter into a Rental Agreement and Option to Purchase Agreement for the real property known as
_______________________________________________________________
To Property Owner:
Please be advised that the undersigned is interested into entering into a Rental Agreement and Option to Purchase Agreement. Please be advised that I am a real estate investor that intends to enter into the agreements contemplated for the purpose of investing in real estate as a going business concern. I now provide you with this Letter of Intent.
This letter is intended to summarize in the separately numbered paragraphs below the terms by which I desire to lease your property located at _______________________________________________________ (the "Property"). For purposes of identification, ________________________________________ (husband and wife) (whoever is on the deed) shall be referred to herein as "Landlord", and XYZ PROPERTY GROUP LLC shall be referred to herein as "Tenant".
1. Property to be Rented.
2. Term.
3. Rental Rate.
4. Security Deposit.
5. Possession Date.
6. Option.
7. Option Money.
8. Representations, Warranties, Covenants, and Indemnification.
9. Legal Effect.
I hope that framework helps you!
I bring the signed LOI to the attorney, the attorney drafts the agreements, the seller signs, then I market for the Tenant Buyer.
I do not market for the tenant buyer until I have a legal right to the property, that is 1) a signed lease and 2) a signed option in my LLCs name.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Good outline Brian!
Larry, or anyone, you can address 8 & 9 in your contracts, you might also have more of an introduction the party providing the intent letter and the address/legal, at this point the tax legal may be sufficient if it's not a lot/block and a meets and bounds, some are long. :)
Wow thanks for the great wishes and detailed responses Mr. Gulley and Mr. Gibbons, I knew that this would be the place to ask those kind of questions, and thankful for your detailed replies... Even from all the reading and researching I've been doing, I'm a bit nervous about this transition and even wondered if this strategy I'm using to get into RI is the best route to take... I thought about just pushing this deal to my Real estate agent friend and watch him do it, seeing as this is my first time....Maybe I personally should just focus on the assignment of contract method and find some " high equity homes" to simply assign and push to some High dollar investor... Seems like there's less risk involved in that....There just seems to be a lot of moving pieces and I don't want to get burned before I even get out the gate... I'll solidify things with my Real estate lawyer and make sure my T's are crossed but its small details about the business that concerns me...guess I won't know unless I try huh?!?!
Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
13y
Dude, your talking yourself out of the deal already, lol.
I say jump in, be transparent with everyone, and listen to the experts above, while your executing the deal! Confidence is large part, i'm still learning this stuff as well, but don't psych yourself out because of fear...paralysis can kill you. Worst case, find a guy whose done it in Florida and split the deal in exchange for helping you through the deal!
Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
13y
Welcome Larry,
This is a great resource for educating yourself. If you want to use my attorney to handle paperwork on you LO, I can pass ya his info. He does nation wide work. It is really pretty easy when you have someone else handling the paperwork.
I do quite a few Lease Options and it is so easy with a good team. I would post his number here, but I don't want the post to get removed for solicitation. So just PM me.
Good luck.
LMBO yeah your right Morris Lucas I was going into the twilight zone there for a second...I read some negative stuff on another website and that paralysis snuck up on me lol... I wont let the deal go...Your are also correct Brian Gibbons in the "fake it to you make it" I'll never get good at this stuff if I never get the first one out the way! On a SN I definitely plan on checking out your website as well...And Rob Gillespie. I would really appreciate that information of your attorney I was just in headed in the direction of setting up a rendezvous with an attorney here in my area and because I never had to use one, (especially one for real estate) I didn't exactly know where to start... NOW I DO!!! This was only my first post and my expectations of this social forum has already exceeded itself...I love it man...This is going to be fun!!!
More positive reinforcements!!! You guys are like "Real Estate Investor Angels" lol lol...I will stay focused on that prize Sabrina Burns many thanks!!!
Real Estate Investor · Hagerstown, MD · Member since 2011 · 10 posts · 2 votes
13y
It might make you feel better if you layed out the details of the deal on this forum and get a wealth of advice from folks who have a lot of experience. Purchase price, renovations needed, ARV, financing, exit strategy.