Wholesaling, wholesaling lease options

18 Replies

Hi my name is Tyler Hester and i recently moved to Atlanta, Georgia. I just started a real estate investing wholesaling business. I am looking to do traditional wholesaling for, or as i would say reverse wholesaling. It is hard for people to get mortgages these days that is why i want to incorporate wholesaling lease options for properties with little to no equity. Does anyone have any advice on lease-options that does business in the Atlanta area? Is there a market for lease options around the area?

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Hey @Tyler Hester ! The Big ATL would be a GREAT place to do lease options!

Look at the size of the market you have to work with!

I always recommend @Michael Carbonare at naked-investor for his book on starting off in lease options, and @Brian Gibbons is a fantastic resource as well!

Look for nice houses in nice areas, that are in the median price range..in other words..nice houses the average family can afford. That may be $200k for your area, it might be a bit more.

For me, in the Fort Worth area, I look for houses between $130k to $300k..I actually like houses in the $160k - $230k range.

We've done cruddy houses in cruddy areas, and guess what?

We got cruddy people!!!

I target the listed houses in specific zip codes with my tri-fold brochure and postcards.

Hey @Tyler Hester ! The Big ATL would be a GREAT place to do lease options!

Look at the size of the market you have to work with!

I always recommend @Michael Carbonare at naked-investor for his book on starting off in lease options, and @Brian Gibbons is a fantastic resource as well!

Look for nice houses in nice areas, that are in the median price range..in other words..nice houses the average family can afford. That may be $200k for your area, it might be a bit more.

For me, in the Fort Worth area, I look for houses between $130k to $300k..I actually like houses in the $160k - $230k range.

We've done cruddy houses in cruddy areas, and guess what?

We got cruddy people!!!

I target the listed houses in specific zip codes with my tri-fold brochure and postcards.

Thanks John! I appreciate the advice. I will most definitely take your advice and run with it. I figured that since I do not have the capital to spend on passive properties that I should wholesale to get some money because it is relatively faster to get paid, then i can start building my buy, fix, and stay portfolio . However, I found lease options and this seems like a little quicker way to pocket a couple grand. Again, thanks for the advice!

I have the same question,I live in the Boston area can anyone give me advice.

I always recommend starting off doing ASsignments. Also referred to as CA's (cooperative Assignments) flipping LO's, wholesaling LO's, and link options.

This way you are locking up the lease option terms with the owner, then assigning your contracts.

The terms are fairly easy to set, as you are trying to set the option price at the top market dollar so there isn't negotiating with the owner.

You assign your contract and get paid your assignment fee.

There's more details to it than that, but you get the idea.

To give you an idea of actual properties you can look at leasingtobuy.com just for ideas.

For direction on info, I always recommend @Michael Carbonare as he has done a number of CA's.

@Brian Gibbons has lots of experience as well!

@Tyler Hester welcome to BPs!

@John Jackson @Michael Carbonare and I know lease option assignments and have many posts here on BP.

Here are my posts http://www.biggerpockets.com/search?utf8=%E2%9C%93&term=Brian+Gibbons

This is my recipe:

Sellers:

  • Pretty Houses, above the median price, no work
  • Houses are in the best school districts to attract the best buyers with children.
  • Sellers have little equity, the costs to sell with an agent is about 10 to 15% of the appraised value, perhaps Sellers need to raid an IRA or 401k to sell their home.
  • Sellers agree to lease option to my LLC, and then the tenant buyer pays me a fee to release my option.

Tenant Buyers

  • need to be properly screened by a lic mortg broker.
  • High income and debt to earnings ratio needs to be reasonable,
  • also credit issues need to be the kind of problems that can be rectified as per the Fair Credit Reporting Act.

Delve into the posts here and you will pick up many tips on helping sellers sell on lease option.

Thanks for the help.

@Brian Gibbons

I have been coming across a lot of low equity deals where seller wants full market price therefore I have been considering lease option assignments as well. 

My question is how do you position yourself to the seller:

Do you position yourself to the seller as the person that would be moving into the house on lease option?  Or do you let them know you will be assigning your terms to another tenant buyer?

Also, to whom does the T/B pay their rent check too? 

There are three creative strategies for low Equity deals

One offer subject to existing financing

Two offer wraparound mortgage

Three offer lease option

Sub to & wrap you are buying it and paying all outgoing costs

Lease option you are putting a tenant buyer in the house

I sell these solutions not by teaching the tools but by showing what the seller gets if I get involved with helping them with their house problem, 

sell the whiifm s 

what is in it for me

hello lease option people,  I got a call from a lady that responded to a letter of mine.  I went and looked the house.  It's in good livable condition.   Needs some clean up.  She was open to doing a lease option and didn't have any problem with my fee.  Her mother is deceased and left the house to her.  She (the daughter) does not live there either. I looked on the county records and it looks like it is still in her mothers name which tells me that is would have to go though the probate process.  Yes/No?

Question:  is it still lease optionable???  Anyone???

Updated about 3 years ago

There's a typo there it says Donna title I meant to say go to a title company

Updated over 3 years ago

There's a typo there it says Donna title I meant to say go to a title company

Maybe. It depends. And I'm certain about that (!).

@Rick H.

Dont you wish you had complete information so you can properly advise people? :)

That's one of the most profitable skills in real estate: learning to ask better questions.

@Tyler Hester @John Jackson @Brian Gibbons @Rick H. or Anyone can you explain what are some of your "whiifm" points you express to the Seller? In other words what things do you highlight to the Seller to convince them to agree to a Lease Option Agreement?

2) How do structure you agreement with the Seller? For instance, while studying lease options I've heard some say, Put contingencies in your agreement that let the Seller know that you have 90-days to find a Tenant Buyers before the option fee or any rent is required. Ever done that?

3) When the Seller agrees to the lease option, as the investor, what are all the different types of exit strategies you can use? I'm aware of agreeing on a second lease option with the Tenant Buyer (Lease Option Sandwich), Assigning your contract (Assignment), and Finding a End Buyer to agree to Purchase and Sale Agreement (Wholesaling). Has anyone exited a property in a different way?

@Dexter M.

The way I negotiate with sellers as I show them all their options, from selling for cash and paying the costs to sell which is about 10% of value, to renting it out with the property manager, to selling it on land contract, to selling it on lease-option, to selling it on sub2 

Some sellers don't like leasing houses, some sellers don't like giving up the Deed, it's all in the negotiation

Search on BiggerPockets 

"Brian Gibbons negotiating with sellers"

@Brian Gibbons @Rick H. @John Jackson  So within the agreement the wholesaler agrees with the seller a date for example, 30 days from signing that the payments will begin? This way the wholesaler does not have to pay the mortgage? Im confused on who pays the mortgage while Im trying to find a tenant buyer. 

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