Creative Solutions to offer Sellers including Rent to Own.

4 Replies

Hello everyone,

First official post…so don’t be too rough. ;)

Would like to publicly thank @Brian Gibbons for his valuable time and knowledge yesterday. We connected with him to discuss some creative strategies and coaching. Many of the ideas we were familiar with, but not all the specific action steps to implement them. It is one thing to know about a technique it’s an entirely different thing to know how to properly execute the technique for maximum results.

Brief history: For the past two years we have been actively building our real estate business through a private investment group that we formed for short term deals. We started by working with a broker going to auctions as well as purchasing short sale properties. As most investors quickly realize those particular strategies are hit and miss due to the stiff competition (at least here in CA). Consequently, the quest began several months ago to find more creative solutions. Enter Bigger Pockets and all the great resources, knowledge, community and support that BP has to offer. Being a part of BP has given us the opportunity to connect with seasoned investors such as Brian. What a great resource!

Here are some of the highlights from our conversation. Some of these topics may be of interest and may want to be discussed in further detail:

  • Advantages of having a license vs not having a license
  • Expired listing goldmine
  • Rent to Own
  • How to give choices to the seller that can eliminate the competition
  • Creating a Joint Venture with homeowners
  • Specific steps in dealing with disgruntled sellers and how to create a win-win solution
  • How to quickly create cash flow
  • Most investors do not have a specific action plan they tend to take a Ready, Fire, Aim approach

I do have to include a small disclaimer: Some of the information Brain asked me to keep confidential, so I will do my best to answer questions without violating his confidence.

Thanks for the kind words

@Dave R.

Hi Dave!
I am a little late in finding your post but I found it interesting...
Do you care to expand on the following topics
•Rent to Own
•Expired listing goldmine
•Creating a joint venture with homeowners

Thank you in advance

@Wayne Mack

Hi Wayne,

Thank you for the kind words. 

Hopefully this will be informative and helpful...

Rent To Own: 

This process involves working with both motivated sellers and home buyers. The investor enters into contract with the motivated seller and then brings their buyer to the table. The investors buyers list can be generated either through websites, social media, marketing campaigns, real estate agents or through word of mouth. It does require work, as with most things in real estate, but in the end it can be a great solution for the seller and the buyer. The buyer will typically have strong income and a good down payment but may have weak credit. This program will allow the investor to solve multiple issues for both parties. A true win-win. As a side note: double check state regulations regarding this type of transaction as there may be a license requirement.

Expired Listings: 

If you have your license this is readily available. If you are not licensed, call around and find an investor friendly agent and ask them if they would be willing to pull the expired listings for you. Agree up front to list the property with the agent if you find the right deal; this will go a long way in building credibility. Building strong relationships, trust and loyalty with your team is vital to success. It will pay huge dividends in the long run. 

Obtaining phone numbers off the expired listings can be tricky. The owners name and phone number are usually not on the listing so you have to get creative or purchase the information. There are several companies out there that have been discussed in other posts here on BP that vary in price. Figure $60-$300 per month depending upon the company. If you wish to save some money ask the agent if they already have this service and offer to split the cost. Be prepared, 20-40% of the numbers will not be accurate. It's a numbers game and you just have to keep dialing. Understand that you will be competing against real estate agents that are trying to get a new listing. The good news is if you persist and present yourself correctly you will be able to speak with a lot of sellers. Another option would be to drive to the expired listing and introduce yourself and see if there is a fit. If there is an agent involved, leave your information as a backup plan for the seller. Then follow up, follow up, follow up. My suggestion would be before calling homeowners familiarize yourself with the "Do Not Call" rules and regulations. 

Creating A Joint Venture: 

This is a pretty in-depth subject so we'll give the 30,000 foot view. This solution allows the investor to work with a homeowner that has a house that requires rehab work in order for the house to sell quickly (first week on the market is the goal). Typically the investor will provide all the financing, project management, labor, and materials to bring the house to a highly marketable level. How extensive one goes in a rehab is determined by what the buyers are looking for in that specific area (very important). A note of caution: The investor needs to fully understand rehab costs and the risks affiliated with this type of solution. The homeowner will have certain expectations and will need to feel comfortable before allowing the investor to rehab their house. We strongly suggest the investor involve an attorney on every transaction. Also, that they confirm the contractors being utilized are both licensed and insured.

Tip: At the end of every project make sure the contractor signs an agreement that they will not place a mechanics lien on the property. The agreement should also act as an acknowledgement that they have been paid in full.

A couple of ideas to consider: bring the contractor in as a partner or offer to pay a bonus for finishing early, on budget and for doing a good job.

If you have any further questions, don't hesitate to ask. 

Wishing you much success! 

Originally posted by @Dave R. :
  • Advantages of having a license vs not having a license
  • How to quickly create cash flow
  • Most investors do not have a specific action plan they tend to take a Ready, Fire, Aim approach

Hello Dave could you explain these as well. 

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