What are some good ways to find tenant buyers for a rent to own or lease option property?

17 Replies

What are some good ways to find tenant buyers for a rent to own or lease option property?

Hi Brandon, I do lease options and seller finance on some deals. Bandit signs (do it legally) and Craig's List are quite effective for me. 

Thanks Andrew

@Brandon Brown

  • Door Hangers on apartment doors - message drive to a website
  • Meetup.com Group - Create One - Meeting at a restaurant for just denied for a mortgage
  • Go door to to door next to RTO Home - Pick Your Neighbor Flyer - Earn $50 dinner certificate nice restaurant
  • Bandit Signs and directional signs - Rent to Own Home
  • BIG yellow hand written sign on front yard
  • Craigs list ad
  • OnCarrot.com Tenant Buyer Site
  • https://oncarrot.com/rent-to-own-website-templates...

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Wow Thanks Brian!

What @Brian Gibbons said. I've sold all of my RTOs with signs either directly (buyer called or visited website about that property) or indirectly (buyer visited website and bought another property).

I can also recommend open houses. A few nice "Rent to Own - Open House" signs in the area the day of pulled in 40+ visitors to one of mine. A friend has sold ALL of his RTOs by open house.

Don't forget the get the contact info for all those visitors. The friend I just mentioned has sold as many as 4 houses from 1 open house. It's easy if you have a house that shows well, it's cheap, and it's a lot of fun meeting all those eager buyers! :D

Thanks Doug

I only need to use:  Craig's List, Postlets.com, and Rentlinx.com   All free!! 

craigslist   I do it excatly like this  www.ownjax.com/lochness

I have done 15 properties this way and gotten, no kidding, 8000 leads. 40% internet 60% phone to a call screener. This actually is not as cool as it sounds, too much to sort through.  Now I force them to the form above and they have to answer 15 questions and the best come to me. 

In the end if you are doing rent to own you want a bunch to pick from. I do this by charging a rental rate that is inline with mortgage rate which is usually less than rent, this is what generates all the interest. 

Even if I have to take 100-200 less in rent in exchange for a bigger down payment AND a more qualified lead that can get a mortgage in 2-3 months as opposed to a year, im better off. 

Just followed Ken A's tip and saw that

Rentlinx.com

is a very useful place.

Thanks BP community!

The key is to find quality rent to own clients. I have tried many different ways and here are the ones that are most effective for me.

1.  Google Adwords (by far the best ... I can get 100's and 100's) so if you don't mind the cost this is all you really have to do. Spend $1000 a month and do 1 deal. It's worth it.

2. Online classifieds (Craigslist and Kijiji in Canada which is where I am)

3. Facebook Ads - Just experimenting with this now.  A lot cheaper than adwords and you get get a lot more targeted. The key is to define the right audience.

But as I said, the key is to get "quality" leads.

What I do is send them to my oncarrot site and filter them like cray.

1. Send traffic to my site (let's say I get 100 visitors)

2. Ask for their email and name (about 20 will give me that information)

3. Next they are brought to a page that asks for more info. Deposit amount, monthly rent budget, type of house, are they are looking for. (about 10 people will go through this step)

4. Next I have a person that calls them up and qualifies them. Basically, she asks if the information they provided is accurate. Do they really have the deposit amount they specified and can they really afford the rent they said they could. (I get about 5 people out of this. The othe 5 said they just put that down so it would take them to the next page)

5. Then my lead manager sends the fully qualified lead to my salesperson who calls them up and arranges for a meeting with them. If they are interested in moving forward, they must provide a deposit so I know they are serious.

I had a related question about working with other investors to identify tenant-buyers.   I happen to be running out of time to find a tenant-buyer/assignee for a lease option wholesale deal I'm working on, so I've been networking with other lease option investors in my market in hopes that they may have someone on their buyers list that's a fit for my property.  

My question is, do I need a marketing agreement or JV agreement for another investor (not a principle in my contract) to market my deal? I don't want anybody acting as a real estate agent without a license.

If so, does anybody have a sample contract I might be able to use?  I've spent a few hours researching and can't find any information on this aspect of wholesaling lease options.  

Any help is appreciated! 

@Ken A. is 100% correct.

@Ryan McKenzie you should be able to just give it back if no one comes forward if you've structured it right, correct? We do have JV partnerships but that is structured at the outset of the working relationship. I don't think you would need one in this instance. Just an agreement that says you will pay the other investor a referral fee if the buyer comes from them.

Not sure if that answers your question?

Would any be willing to show what the numbers of a rto deal look like? What's the advantage over just listing it on the mls?

Originally posted by @Thomas Dionne :

craigslist   I do it excatly like this  www.ownjax.com/lochness

I have done 15 properties this way and gotten, no kidding, 8000 leads. 40% internet 60% phone to a call screener. This actually is not as cool as it sounds, too much to sort through.  Now I force them to the form above and they have to answer 15 questions and the best come to me. 

In the end if you are doing rent to own you want a bunch to pick from. I do this by charging a rental rate that is inline with mortgage rate which is usually less than rent, this is what generates all the interest. 

Even if I have to take 100-200 less in rent in exchange for a bigger down payment AND a more qualified lead that can get a mortgage in 2-3 months as opposed to a year, im better off. 

 Thomas: What type of website / template do you use to setup ownjax.com? I would love to do something like that to use here in Colorado. 

I got it from split testing with this internet guru guy Justin Brooke.  I think people believe it more than something more flashy... like its from the actual owner of house. 

I have a guy thats real good and does all my website stuff that could probably set it up for you on your account and integrate with your CRM but ud have to pay him something.  

Doesnt matter to me as long as your not in Northeast FL. 

Hi @Andy Argonaut

Rent to Own, Id rather call it "Lease then own".

Lease Purchase Advantages For Buyers
Low money down to get into property.
Qualification restrictions are not as great as in conventional financing.
Past credit problems are not usually a road block, as they would be in the case of conventional financing procedures.
The option consideration (money you pay for the lease to own) is fully credited to the closing costs when buying of the property.
Your rent money is working for you. Part of your rent payment can be credited to the closing costs if paid on time.
Purchase price is usually locked-in ahead of time. Gives you sufficient time to check out all the features and faults of the house.
Time to check out the neighborhood.
Puts you in legal control of a property for a specified period of time without having to actually own the property.
Time to shop for and obtain the best financing.
Major maintenance and repairs are the responsibility of the owner; you take care of nothing but what the lease requires.
Profits ...in case appreciation occurs and you decide to sell in the future.  The difference between what you paid and any increase in fair market value is all yours!

Lease Purchase Advantages For Sellers
Usually top sales price for the property.
Large market of available buyers at all times.
Better quality tenants because these are really tenant/buyers.
Top market rent for the market area.
Non-refundable option consideration (initial move-in payment) which is the
seller's to keep.
Maintenance is delegated to the tenant/buyer that is legal and that is stated in the lease.
Seller remains on the deed -it's still his-her property until the option is exercised.
Seller retains the tax shelter (expenses, interest write-offs).
Lease purchasing (lease-to-own) puts pre-qualified, reliable tenant/buyers in now-vacant properties.
Stops the money hemorrhage of mortgage payments in the case of vacant properties or where a "tenant" may not be paying (it happens).
No fees to pay (especially application fees, 6%Realtor commissions, closing costs, etc.).
A competent accountant or tax attorney can file legitimate write-offs, deductions, exchanges and other mechanisms provided by law.

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