Can anyone provide a sample of a pre qualify form that they use to qualify lease option candidates, not referring to contract(even thought Id like to see some samples of that also)
How do you determine if your prospect would be a good candidate for a l/o… when you meet with them for the first time and they say they want to lease to own, how, what do yo do to determine if they will be able to qualify for mortgage in the future, or do you just sign the option,have them give a deposit and tell them to purchase in a period of time. or, do you pull credit, get pay stubs, tax etc to determine if they would be able to qualify for a mortgage. what is the best method to qulify your candidates initially
I don’t use any preqaulifying forms on my buyers. My investment group is teamed up with a mortgage company who screens our buyers. The way it’s set up is that any serious buyers who want one of our houses have to talk with our mortgage broker before they can move into the house. Our mortgage guy charges them a fee for pulling a credit report and doing an analysis to determine how long and how much they can get a mortgage for, so there’s not out of pocket expense on my part.
it’s a good system because it weeds out the “tire kickers” and “never gonna qualify for a mortgage” tenant buyers. Anyone who is serious about buying the house will be willing to pay the analysis fee. Also, we know upfront how long until they can qualify for a mortgage and make sure they can afford the purchase price before they ever move in. I NEVER want to put someone into a house who won’t be able to afford it at the time of purchase. It then comes down to the dicipline of the buyer to make sure they do what they need to do to qualify at the time of purchase.
Screening tenants and t/b’s isn’t difficult. They complete one of my Lease Applications, I do my due diligence and verify a few things, check out their credit report, trust my gut, and make my decision.
This sounds like a great idea, curious if any other investors use this screening method or if they just put any t/b in the house that has the consideration (down payment) and “hope” they qualify. If this is the case, it sounds unethical as t/b’s are put under l/o’s and if they don’t qualify at the end of the period, the investor keeps the consideration and any cash flow, then its rinse wash and repeat without any real intention of closing the deal. Wouldn’t this net more money if done several times on the same property than closing the deal?