I finally did it! I started contacting potential sellers today about doing L/O on their homes.
I do have a couple of questions for you guys that have done them before.
1- How does keeping the existing mortgage on the home affect the sellers ability to obtain a new mortgage for the new home thay are going to?
2- What can I do for people that are begind on their mortgage payments. I will be collecting a deposit from the new tennants, but thay my not be enough to cover the amount in arrears, especially if I am greedy and want to keep some for myself LOL.
3- How do I compete with other investors in the area that are doing deals for nothing down? I really want to get some kind of deposit from the new tennants.
What can I do for people that are begind on their mortgage payments. I will be collecting a deposit from the new tennants, but thay my not be enough to cover the amount in arrears, especially if I am greedy and want to keep some for myself LOL.
What deposit are you talking about? In my case, I do not collect any security deposit. I get a non-refundable deposit as an option. You are an investor, of course you want to keep some money for yourself.
Before: Option consideration deposit
During: Positive Cash Clow.
After: At close or create a note.
How do I compete with other investors in the area that are doing deals for nothing down? I really want to get some kind of deposit from the new tennants.
I dont understand what kind of LP are you getting into, what books you read or who trained you. You need to understand one thing and one thing only:
Get a non refundable option consideration. Competition is everywhere. My lady secret? Win/win mentallity, love for people and focusing in helping them achieve their goals. Money will come just focus in helping others.
Ussually if they are considering selling on a LO, they have the ability to get another house based on their credit and income. If not, or if they are behind in payments consider buying subject to their loan and then tell them that having a performing mortgage is much better then late payments or a foreclosure.
Only lease option from people that you feel are responsible and will not do things that will coud the title during your option period. J
To add to the comment of avoiding someone to put a cloud on the title. I suggest to record a Memorandum of Option. This places a cloud on the title so if the seller wants to get tricky with you, anyone (lender, etc) with the right mind won’t do anything if they see a cloud like that.