What to do with leads looking to buy property?

Question

Hello BP community,

I have been wholesaling for the past month in Houston, TX. I received several calls from individuals looking to BUY houses. They have poor credit and cannot get financing from a traditional bank.

So, my question; what do you do with these individuals?

Any help would be much appreciated.

Thanks!

Roy Oliphant · Answer

There are significant reporting requirements that can put your ownership at risk when you do a lease option for more than 6 months in Texas.  Separating the deal into multiple contracts does not protect the seller.  A judge can rule the multiple contracts were actually part the same transaction and thus the seller is under the same rules.

Lease optioning in Texas, for purchaser occupied housing is a very limited option.

John Jackson · Answer

@Cameron Tope   !!!!!!

@Cory Boren   !!!

Hello Houston!!!!

I JUST got off the phone with a guy from Katy!

I'm driving to Houston tomorrow for a big 3 day event.

If you are in Houston you HAVE to connect with Tim Mai!  He's a great friend of mine and runs a top notch RE biz. there.  I love him and AC!

If you have people that want to buy but have bad credit...they could do a lease option, unless their credit is really bad then owner finance.

Brian Gibbons · Answer

@Lara Smith

@John Jackson

Has done over 500 lease options in Texas

Texas lease option laws are unique and do not follow many lease option guru trainings

Cameron Tope · Answer

Thanks everyone for your insight, much appreciated!

Cory Boren · Answer

Great debate...

Roy Oliphant;  I agree, the terminology that is used, lease option, contract for deed, lease purchase, ect... all lead to the same trickery that the judges don't fall for. The buyer has some form of equitable title which makes it difficult for a seller to regain possession.  I learned the hard way.

John Jackson;  I would love to read the 7 sections title 2 of what law?  Will the Dod Frank supersede?  From what I understand you must file a deed of trust now and have a license if you do more than 5 in a 12 month period.

John Jackson · Answer

You are confusing a contract for deed under Title 2 CH 5 and a lease option.

The law is pretty clear on the 7 sections of Title 2 that apply to a lease option.

Just have you attorney call me with questions....

Roy Oliphant · Answer

@John Jackson

Even judges...  How do you define the difference between them?  My understanding is they are but different names for the same agreement.  The intent of the law is to protect the buyer from losing money put into a deal that does not immediately deliver title and is structured such that the up-front payment is lost if the future event does not take place so that title is delivered.

Even so, these arrangements are not illegal, just very difficult for the seller to comply with.

John Jackson · Answer

@Cory Boren   @Roy Oliphant

You don't foreclose...you send a 30 day notice of default then evict...

The law is very clear on that.

Most people confuse the requirements for a contract for deed with a lease option....

Even attorneys do...

It's amazing how 10 years after the law was passed how their are still incorrect rumors...

Brian Gibbons · Answer

@John Jackson

I'm sure I can answer those concerns about Texas lease-options

Cory Boren · Answer

Be careful of lease option.  That could be considered an executory contract and they have equitable title.  You may end up having to foreclose at a trustee sale and not use the tenancy eviction process.  Owner finance is also very tricky now with the Dod Frank rolling out.  Prime Loan Services can help you 2815691815

What to do with leads looking to buy property?

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