non exclusive options are awesome.
makes it easier for the investor to work parallel with the seller.
you can get a lot of properties in your inventory by using non exclusive options.
ask for 90 days. if not ask for 60 days. if not ask for 30 days. if not ask for 10 days.
just continue to make offers, get them under a non exclusive agreement, and build your inventory. youll get a lot of buyers this way for other properties that can match up.
Sure, if you consider a few thousand bucks ‘good money’. You won’t get rich off of assignments unless you do a ton of them and depending on where you look you might find that fairly easy or extremely hard.
Defcon, totally. NEOs are ridiculously easy to get especially if it’s just a straight option, not a lease option. I’ve dropped the time requirement altogether and just keep on marketing the thing until the seller or I get a buyer. I’ve picked up loads of NEOs without even speaking to the seller, all done by email. Of course easy come easy go most of them don’t close, but it’s a numbers game, and the numbers are heavily in your favour when you have a pile of properties on offer.
So you can use CA’s with a regular option purchase?
Mr Investor, yup you can assign anything. A “CA” is specifically a lease/option assignment. But there’s no problem getting regular options and assigning them too. They’re easier to get but also harder to sell, in my experience.
You know all those sellers you talk to about doing a lease/option who say: “I can’t rent it, I need the cash”? Those are the people who will do a regular option with you. Not everyone mind you, but a lot. I can get an option on about 15% of the houses on the market without breaking a sweat. There are so many that I don’t even bother to reply to people who say anything other than: “When can we sign?” in response to my initial email. I’ve worked at least a dozen NEOs with agents too.
Right, options are the name of the game.
Like Doug said, if a seller can’t rent the place and just needs to sell…you can at least put a NEO on the property and TRY to find a retail buyer and initiate a double close or assign to them.
If they are willing to do a lease-option, however, that’s when you should do a co-op assignment and make a few thousand. The good thing with co-op assignments are you can do a lot of them and often, as long as you’re persistent with your marketing.
Although you can make a bigger chunk of cash doing a straight option and locating a retail buyer, I find it is much harder to do so. You also would need to find a home with a lot of equity that doesn’t have any repairs needed which can be hard.
One of my goals for the year, however, is to do a deal this way, but for now, I plan on chugging through some co-operative assignment deals to build my cash flow.
Alex, it’s not always true that it’s easy to do lots of CAs. It’s totally dependent on your location. Some places are great (like the south and the midwest) and others suck like the northeast, most of Canada also falls into the “sucking” category. Without dealing with it yourself you can’t begin to understand seeing as you’re in a market where sellers welcome creative ideas. It’s just a completely different mindset, motivation be damned.
That’s not to say it can’t be done. But it absolutely is not easy to do a lot of them in certain areas.
I hear ya. I guess I never thought of it like that. I guess it’s a good thing though if most don’t have to resort to creative ideas; not from an investor’s stand point of course.
But yes, here in the Raleigh,NC area, I don’t see it being hard to do 3-4 of these a month.
Doug, nice to you jumped on board this one. haven’t seen ya at that naked place lately. Tell ya what lets you and I pack it up and go to NC.
Herbster by another name
I can believe it. I just glanced over craigslist page one for Charlotte and saw several rent to own ads. Then I clicked on 10 or so that didn’t say rent to own in the heading, and half of them said they were willing to rent to own/lease purchase as well.
Hell will freeze over before my local market looks anything like that!
Herbster, sounds like a plan, I’m sick of -20C with 6 feet of snow on the ground and equally chilly sellers 
We just got our biggest snow in 5 years a couple days ago; a whopping 5 inches! It’s crazy, you get a few inches here and people don’t know how to drive.
There are in deed a good bit of rent-to-own’s. It’s strange though since the NC market–especially Charlotte and Raleigh–are one of the few areas to still be doing “ok” in these times.
Can you do CA’s with commercial real estate?
Alex, the market isn’t exactly ‘bad’ here although it is much softer than the heydays of 2005-06. But strangely enough sellers are less willing to do L/Os than they were back then. So current market conditions don’t have as much bearing on seller attitudes as conventional wisdom would have you believe.
Mr Investor, I haven’t personally done one, but anythings possible with the right seller and buyer.
I’ve just ordered Michael Carbonare’s course can’t wait to soak up all the info :cool
I’m ordering it today as well!! I’ve heard it’s the best $97 investment one will make…
How do you find this lease option to buy deal?
So I'm getting ready to close on my FIRST DEAL EVER next Friday.
I just started reading your thread today, and Congratulations AlexLock85! :beer I got to thinking as well, and want to ask have you ever read hassin’s thread on the Beginners, Carlton Sheets forum? I was thinking, IF you are interested, if you have time to start one similar to motivate and inform everyone whom are new, seasonal, and experienced on your niche. This will be beneficial for not only us, but for you as well… just like as if it were a daily journal. I don’t know if anyone feels the same way I do, but reading this thread is an eye opener :shocked From one young man to another, what do you say?
-Victor
One thing I wasn’t clear on, but want to point out is that you have to be careful you are not acting as a real estate agent in your deals.
You always need to have some sort of ownership interest in a property be it an option, or signed offer to purchase, or you are placing yourself at risk of operating as a real estate Broker without a license.
I couldn’t tell from your post how you were doing things, but anyone who “puts two people together” to do a deal without being part of the deal is brokering.
Ok… with all the scary stuff being said, Congrats on the deal. It does feel awesome to get that first check.
If the equity is there, and the deal makes sense for the investor, don’t be afraid to ask for a lot.
We just assigned a contract for $8500 on a $50,000 purchase price.
While this sounds like an awful lot of money, it was still a great deal for the buyer. The property is worth $110,000 as it sits, and the seller gave us excellent terms to purchase it (1/2 down, no interest, no payments for two years on the balance.)
So you’re telling me someone like William Bronchick who happens to be a RE attorney and has a course on lease options is breaking the law by brokering um don’t think so guy :rolleyes
When signing the lease and the option agreements with the seller and paying the seller one whole dollar you are now a principle in the deal. Now its yours for a specified length of time and you go out and find a tenant/buyer to assign the deal to.So you are trying to sell your own place and not practicing RE without a licence. In Mi. you can do 5 of these and any after that you would need to be represented by a broker.Herbster
Like Mr. Investor and Herbster said…once I sign an option for a designated period of time, I’m now a principal and have an equitable interest on the property; I’m free to market as I please.