Call FSBO to propose a lease/option

General Real Estate Investing
1

i’ve heard some bad feedbacks about calling FSBOs and asking for deal. So i want to get a nice script to use on the phone, to get them interested in a lease/option, but if not, still leave room for them to consider cash buy exist strategies. i was never good at selling so please critique.

Hi, my name is XXX, may i speek with YYY
oh Hello.
I am a local investor. I am calling regarding your selling AD of a house at ZZZ. Is that property sold yet? no? oh great.
well, I aaaaam going to purchase five investment properties in this area within this year. Mr. YYY, Would you be interested in leasing the house to me, while i put my funding together, and have the option to buy it at an excellent price for you? Of course I will also be managing the property at the mean time, so that you do not have the spend any more time and energy. (then they will say yes/no. and if yes, i will go on ask about their info, how much mortgage, need repair or no, when do they must sell, if everything fits, go look and negotiate)
(if they say no, then I go on say)
I see. is it because you need to sell your home fast? (then move on to another exist strategy, if they are still talking…)

what do you think? i think its very primitive…haha.

2

Doug Pretorius does a lot of lease options, you might want to shoot him a PM. Seems as if he is active in this arena.

I think he lives in Toronto too :biggrin

I’m sure he has a pretty good script.

I wouldnt quite use the one you have there.

3

lol!! guess what, i already sent him an email, i actually got the idea from his post.
i think he is in Kit/Wat/Cam tri-city. so no competition. (i hope)

4

You sent me an email? I haven’t received it. Do you have my new email? Just go to www.homeseveryday.com and click the email link to the left.

Competition is the last thing you need to worry about in Canada there are no where near enough investors to do all the deals that are available.

Now, about your script. I hope you wanted a blunt response because that’s what you’re about to get. No offence but…

That script BLOWS!

I’ll critique it from the seller’s perspective:

Hi, my name is XXX, may i speek with YYY
"Whaddya want?"
I am a local investor.
"Oh great now he's going to trying to buy my house for nothing."
I am calling regarding your selling AD of a house at ZZZ.
"Yeah that's right, I want to SELL it and I want FULL price from the big pocket investor too."
Is that property sold yet?
"Would I still be talking to you if it was?"
well, I aaaaam going to purchase five investment properties in this area within this year.
"Mr. Big thinks he's so much better than me, what a jerk! I don't give a rats ass how many houses he's going to buy, I just want somebody to buy MINE!"
Would you be interested in leasing the house to me, while i put my funding together, and have the option to buy it at an excellent price for you?
"This guy is nuts! First he tries to convince me he's going to buy FIVE houses this year, and now he's telling me he can't even get a mortgage! What a load of crap!"
Of course I will also be managing the property at the mean time, so that you do not have the spend any more time and energy.
"No you won't! Because I'm hanging up right now!"

Yes sir… I think it’s safe to say we need to make a few changes to that script for ya :flush

My script is always being modified but here’s the current incarnation:

Me: “Hi, is this the owner of 123 Main Street?”
Seller: “Yes it is.”
Me: "Great, I was wondering if you would consider renting the house, if it doesn’t sell?
Seller: “No way!”
Me: "Goodbye!

Seller: “Hmm, ‘if it doesn’t sell’ you say? Well ahh… my husband and I had talked about maybe doing something like that.”
Me: “And if the tenant wants to buy at the end of the lease, you’d be happy with that?”
Seller: “No if I rent it, I rent it, I wouldn’t want to sell.”
Me: “Goodbye!”

Seller: “Absolutely! I am trying to sell it after all!”
Me: “Perfect! (after thought) oh my name is Doug by the way! That’s exactly what I’m looking for because I manage lease-to-own sales for homeowners. When would you like to get together?”
Seller: “I’m not sure, how exactly does this all work?”
Me: “Let me get your email and I’ll send you some information to look over at your convenience.”

Then I send them some info that answers the most common questions sellers have and highlights a few of the deals I’ve done with testimonials. And I wait for them to get back to me.

No high pressure sales pitch. I just qualify them and send them info so they can decide for themselves. My aim is to do absolutely zero “convincing” and zero “negotiation” because I royaly suck at both.

If everything goes according to plan the seller calls back within a few days to set up an appointment to sign the paperwork.

Simple as that. Well, maybe not simple. I took me 7 years to get to this level of efficency! And I’m not done yet.

5

Excellent post Doug. Your posts here and on other boards are always very helpful. :cool

6

lol thanks!
must an option to purchase be signed before a notary in Canada?

7

Thanks Rich.

BFC, no notary required in Ontario, I’m not sure about other provinces.

8

Thanks for the knowledge their Doug.

Who does all the closings in Ontario? Notaries?

In Quebec its notaries that do it all, but would like to know more about Ontario.

9

Tien, lawyers to all the closings here.

10

i started calling FSBOs, YAH!
most people are polite. the % is quite on. I dont ask them if they would like to meet up, i just go directly to email. Toronto is way too big, its not practical to meet them all. now my problem is to send an email that present the idea clearly and charmingly

Hi XXXX

We lease, manage and buy your property altogether!
Here is how it works:
We will lease your property, generally for 2 years. The rental, and purchase price of your property will be negotiated so that you will be satisfied! Any time during the leasing period, if we do decide to buy your property, we will pay the price that we agreed on, guaranteed!

Here are some reasons that you might want to consider Lease/Option:

  • No hassle, every month we send you rent, perfect investment.
  • We take care of any repairs that is needed

FAQ:
Q: what if i get an offer during the lease period? can i sell?
A: In such cases all you need to do is contact me. If the price is better than what we offered, we may be able to transfer the option to the buyer.

Q: What do you get out of this?
A: This setup generally fits into our clients profile. And we charge a service fee to our tenant buyers.

appropriate? i just imagined those two question would be asked… what else is there? lol
feedback feedback feedback! anyone?

11

Hello, I’m new to REI but trying to learn as much as I can right now. This scenario looks interesting but I can’t quite wrap my mind around how the money is made.

Thanks,

mekanic13 :banghead

12
i started calling FSBOs, YAH! most people are polite. the % is quite on.
Hey BFC, what do you mean by "% is quite on"? I'm curious what your numbers are and how they compare to my market.

About your letter, I suggest using more direct, more specific, and more confident language. Instead of saying something like: “Generally we do this or that.” Say: “This is what we do and why.”

I also suggest that you have at least 2 pages, 1 for your intro letter where you talk about the benefits of doing business with you, and a second page for the FAQ. You want to give them enough information so that if they call you back then you know they’re ready to sign.

13

i didn’t call that many. but its about 1 out of 3 people wants more information. As i contact more people i will get a more accurate number.

14

That has been my experience as well, right in the 30-40% range. Of course only a few of those end up agreeing to your terms, but at least you have a good starting point when the intial interest level is that high.

15

hi Doug, i sent you an email. thanks for all the help.
and btw i was thinking of modify a bit of this contract
http://www.floridacdc.org/forms/form28.html

and nope, cant afford for a lawyer to write one for me for 1000$ right now. :biggrin

modified version below:

Are you considering renting out your property because it’s taking a long time to sell? Are the buyers trying to negotiate the price way below the market value?
We will lease, manage and BUY your property altogether!
Here is what we do and why:
Step 1: We will rent your property for a 2-year period of time (varies depends on region). The rental price and purchase price will be negotiated up front to mutual satisfaction. We will have the option to purchase the property during the agreed time period.
Step 2: We will rent out this property to one of our qualified clients. The tenant will pay monthly credit on top of rent as credit towards purchasing the house. (of course all the transactions are done on our parts, so you do not have to worry about this step).
Step 3: Any time during the leasing period when the tenant decides to purchase the property, we will contact you and set a suitable closing date. And it’s done! Your property is sold.
Benefits:

  1. No landlording for you, we manage tenants and property.
  2. Our clients are serious potential buyers. As they will put down a monthly payment towards purchasing the property.
  3. Just sit and collect rent while waiting for your property to be sold, that’s all you have to do! Perfect investment.
  4. If you do not have an agent, there will be no agent cost for you during closing.

FAQ:
1.Do I need a lawyer for this?
No. We use two simple contracts. Lease agreement and Option to purchase agreement. You may wish for a lawyer to review the documents, just to make sure everything is correct.
2.What do you get out of this?
We charge our tenant buyers a service fee.
3. What if the tenant doesn’t buy the property at the end of the lease period?
We structure the contracts so that, if this does happen, there will be another tenant buyer assigned to the property. It rarely happens, but if at the end of the lease period the property is still not sold, you may choose to list it for sale again or extend the option.
To qualify:

  • You must have less than 90% mortgage left on the property
  • Property in good condition

For any additional questions please email, or contact Big-fat-cow at XXX-XXXX

16

BFC, I’ll make you a deal. You call sellers and find me a deal in Kitchener, and I’ll give you my Ontario-specific contracts that I’ve already spent those thousands of dollars on.

If you’re interested I’ll email you with my house buying criteria.

Doug

17

omg…for sure!
send me at the email below,
or the one that i used to send u email with.
thanks!!!~~~~