Lease options with a realtor

5 Replies

So here is my business plan:

1. Find a motivated REALTOR that has a house that he/she is having trouble selling.

2. Have the realtor pitch the idea of a rent to own to the seller.

3. Then as the investor, sign a lease purchase agreement with the seller.

4. Go out and find a tenant buyer and sign them the rights to the lease purchase.

5. Tenant buyer pays a 3-5 percent non refundable downpayment which I keep and I put the seller and tenant buyer together for the lease payments.

6. The realtor would get their commission on the back end when and if the tenant buyer qualifies or a mortgage.

7. Also to sweeten the deal for the realtor I could offer them 25 percent of the 3-5 percent I received as the downpayment.

Please comments, suggestions etc...

I suppose that's possible, but that's a lot of moving parts for the deal to come together.  Looking at it from agent's perspective, "What's in it for me?"  Waiting a year for my commission and even then it isn't a guaranteed sale doesn't push too many buttons.  And sweetening the deal, as you say, for 25% of your 3%, isn't likely to motivate an agent to work with you.
Why don't you simplify matters and deal direct with homeowners?

Originally posted by @Michael Carbonare :

I suppose that's possible, but that's a lot of moving parts for the deal to come together.  Looking at it from agent's perspective, "What's in it for me?"  Waiting a year for my commission and even then it isn't a guaranteed sale doesn't push too many buttons.  And sweetening the deal, as you say, for 25% of your 3%, isn't likely to motivate an agent to work with you.
Why don't you simplify matters and deal direct with homeowners?

Agreed.  While this is creative it sounds complicated.  Add to the fact that no one is really having trouble selling a home that is in livable condition, right now.

Remember, keep real estate simple that is the easiest way to have long term success.  Get enough cash, buy a property that cash flows, begin printing money. 

@Michael Spindler what price point are you working with?

I only have experience with one lease purchase and dealt directly with the owner, so the following isn't from experience..

Could you... offer the realtor 1% of the list price when the lease purchase is contracted?  And the remaining 2% when the house is officially bought/sold..

Could you... buy this house yourself from the owner, pay the realtor their 3% commission, and cash flow enough for it to make sense?

Could you... take over payments from the owner with no money down and then rent out the house and cash flow?  And have the owner pay the agent..

@Michael Spindler   I agree.  The most difficult part of our business is finding the deal.  But adding another layer, in this case, a real estate agent, will only add to that difficulty.  
And you are correct about many homeowners being unaware of a lease option and how it might solve their problem.  But that's on us to educate them and explain how our offer is beneficial to their situation.