Now is the time to take bold and calculated action… The real estate market has changed dramatically over the past decade. Today it’s relatively common for a home seller to encounter an investor (or at least know they are out there). As a result of this knowledge, sellers are more open to putting together creative deals.
As an investor, your advantage over other buyers is offering flexible purchase options to sellers.
What You Have to Offer to Sellers
Retail buyers offer sellers a long drawn-out process that starts with negotiating, moves on to inspections, followed by more negotiating (and possibly expensive repairs), followed by a long mortgage approval process that requires an appraisal, and sometimes even more negotiations. During this long grueling process, there is no guarantee that the sale will ever get to the closing table.
Through flexibility and creativity, you (as an investor) can put cash in the seller’s pocket as soon as tomorrow afternoon or next week. You can work with the sellers’ realtor or you can work directly with the seller. With a sandwich Lease Option, you can guarantee to make the seller’s mortgage payment that’s due next week.
Sandwich Lease Option investors are problem solvers!
There are always motivated sellers in the marketplace. Not all sellers will be motivated to sell on a Lease Option agreement, but there will always be more than you need if you know how to find them! Today, the real estate market is more open to creative solutions than ever before. This means more opportunities for investors.
All you need is a way to start the conversation….
Getting the Conversation Started
At the top of my website, you can get my Seller Scripts for free by filling out the form. This is key to getting started. Before you do anything else, you have to gain the seller’s interest in what you can do for them. Sometimes, sellers will call you looking for answers and sometimes you make calls on houses being advertised for sale. Right from the second you pick up the phone, you need a plan that engages the seller to learn what you can do for them.
Here is how you get started….
Before you make the call to a potential seller, look up information on the home in public records if you can. You should be able to see when the person purchased the house and how much they paid for it. You can closely estimate what a potential seller’s monthly mortgage payments are and how much equity they have in the house. You’ll also know how much the property taxes are. You can look at comparable sales to know what the current market value is. With this information at your fingertips, you’re ready to make the call.
Investor: I’m calling about the house you have for sale. What can you tell me about it?
Then you let the seller talk. They’ll tell you things like it has 4 bedrooms, 1-1/2 baths, and 1,800 square feet. Hopefully, they tell you it’s in very good shape and has been recently renovated. If they don’t tell you about upgrades, you want to ask them if renovations have been made. You want to learn what renovations have been made and when. For sandwich Lease Options, you’re looking for nice white-picket-fence houses that are ready to move in. You don’t want the trouble and expense of a fixer-upper.
If the house interests you, you want to ask how much they are selling it for (even if the price is listed in the advertisement). From your research, you should know it’s worth it. In this example let us say it is $240,000 but they might be asking $250,000. This is where you begin to let them know that you are an investor.
Investor: Let me tell you a little about myself. I buy 3 or 4 houses each month (if you do). Some of those I buy for cash to flip but those need to be deeply discounted. Those houses are usually foreclosures, short sales, or owned by the bank. Can you tell me if you can take something less?
Note: “Let me tell you a little about myself” is an important transition to begin letting them know you are an investor.
Seller: I can probably go as low as $240,000.
Investor: Is that as low as you can go?
Sometimes you have to be comfortable with silence during the conversation. At this point, you want to wait for the seller to make you a lower offer.
Seller: I can’t go any lower than $237,000.
Investor: I can probably pay more if you sell on contract. Would you be willing to take monthly equity payments until I cash you out?
Seller: I’m not sure I understand. Can you explain that?”
“Would you be willing to take monthly equity payments until I cash you out?”
Offering equity payments is a major shift in the conversation. You want the seller to ask you to explain what you are offering. This allows you to tell them about flexible options and to learn more about what is motivating them to sell the house.
Moving the Conversation and the Deal Forward
Next, repeat your equity payments offer with some clarification and begin expanding on the benefits.
Investor: Will you allow me to make your monthly payment and take care of all the maintenance until I cash you out? Especially if I can get you more money for your house?
Seller: I’d like to hear more so that I can consider that.
Investor: Can I come to look at the house to make sure that I’m interested in it? We can talk more about what I can offer you at that time. When would be a good time for you?
Seller: Sometime tomorrow works for me.
Investor: What time tomorrow? Morning, noon, or evening? One other question, are you the only owner? (You want anyone with a vested interest to be at the meeting when you explain what you are offering.)
Seller: Tomorrow at 7:00 in the evening would be good.
Investor: We’ll meet at 7:00.
***end of conversation***
Can you do that?
Can you make 10 phone calls until you have a $40,000 profitable deal?
Can you do that again and again until you are making $100,000 or more every year?
There will be details to work out. As soon as you have the conversation started, you’re going to want to have all of the tools that you’ll need in your toolbox:
Advanced strategies for Buying and Selling with Lease Options.
Your Wealth Building Arsenal.
Expand to Get the Deed “Subject To.”
Round it all out by Working with Realtors.
As always, I love to hear back from you on any questions or success stories that you have. Connect with me here: WendyPatton.com/Connect
To Your Success,