i have homeowners to take their homes calling me everyday, however after reading some posts regarding finding lease option buyers that have the funds, should i wait until the economy gets better before taking any houses on the sub2 method. i have the funds to buy and hold my first house for 3 months.
your help is appreciated. i am in oklahoma.
:smile
Can you put renters in the property quickly to cover your overhead, even without a lease option? If so, can you cash flow?
If the answer is yes, then why limit your potential tenant pool to the lease option tenant-buyer?
thank you for your response. i can,
i have read they tend to destroy homes since they are just renters.
what type of deposit can i require from renters and do you think they would take better care of the house if they were on a lease instead of a month to month agreement?
:smile
Renters destroying homes happens its part of the risk involved. Its your job to thoroughly screen your tenants. There are several screening soures online. thelpa.com for one. In my State you can’t request more than 1.5 times the rent for a deposit, although some do get more. Check your own State on this.
With a lease option t/b you might think a person would take better care of a home that they would eventually own, buts its not always the case. Stop by where they live now and see what its like- slob or no slob. Herbster
thank you or your advise.
:smile
Jcl, just a general thought… Stop focusing on every negative report you hear. The current economical situation has not eradicated qualified tenants with option money. Putting up your house for rent doesn’t mean its going to be destroyed. Yes these risks exist, but the negative aspects for the most part are the exception and not the rule. Start adopting a positive outlook. It will do wonders for your business and your life.
With regards to tenants, I agree that tenant screening is paramount. For example, if you select college students, go for graduates only as opposed to freshman who are known to throw wild parties. Consider the elderly or people with special needs. Also, a lot of people have lost their jobs and are now on some form of housing assistance. They would probably be better candidates than someone who has been on assistance for several years without work.
If possible I would always take a lease option over a pure rental. If you buy a house to rent out it has to be fixed up before renters move in. Witt a L/O many times you can have the T/B (tenant/buyer) do the fix up in lieu of part of their option fee. If you get a cash option fee it’s not taxable and you can use it however you like. You can usually get higher rent payments and a higher sales price with a L/O. With higher rent you can give credits and tie them to on time payments. My experience is that a T/B does take better care of the property and will pay for small repairs instead of bothering you. I believe L/O is the best way of RE investing and can help someone buy a home that wouldn’t have been able to,
See my L/O page at my RE blog for more info. The URL is below in sig.
Good luck,
donrock
The problem is that you need to advertise more for buyers.
Crank up your house selling marketing you have a buyers list of prequalified people (lease option or otherwise) waiting for the homes you have to offer, then you will have no issue with wondering if you should take on the homes.
You can also ask that the seller make the next few payments to give you time to get the tenant/buyers in place. I “sell” this idea to them based on the fact that the sellers will not be paying any closing costs.
I want to also point out that it is these sellers who are in trouble and asking for your help, so don’t feel bad about asking them to make a few more payments.
Never promise the sellers or buyers anything you may not be able to deliver and you will never put yourself in a pinch.