Soaring home prices. Tight inventories. Student debt. Changing jobs. Not able to save enough. Poor credit scores. Each and every one of these is a standalone reason why cooperative lease options are in hot demand today. When you take all these together, you couldn’t ask for a better marketplace or time to be getting started with the lowest cost and lowest risk method of real estate investing!
The time to start making cooperative lease option deals is TODAY!
Day 1 and Step 1 – Finding Cooperative Lease Sellers
Near the end of last year, I said “You Can Do 24 Cooperative Lease Options Next Year.” Guess what? It’s next year and if you haven’t already gotten started, time is a-wasting in the hottest cooperative lease option market you will see in your lifetime.
So, let’s get started while the time is ripe for cooperative lease options to make you wealthy.
The first thing you do is find cooperative lease option sellers from the 3 primary sources.
The 3 sources are:
- Craigslist. Look for “For Sale By Owner” and single-family rental houses. These will be the majority of active sellers to get you started.
- Yellow letter marketing. This works best when you target a desirable neighborhood by zeroing in on the homeowners. This should bring in about 40% of your deals in the beginning.
- Referrals. This is where you want to get to quickly if you want to do 24 cooperative lease options this year. Over a brief time, these can become 50% of your deals. But you have to be active in the market before you will generate referrals. This is also why every deal must be based on integrity. Never underestimate the power of word of mouth marketing. It’s the best advertising that you never pay for. Referrals based on integrity are the bedrock of WIN-WIN-WIN deals. You stay in business. You accumulate wealth. This is how you generate paydays week after week, month after month, and bring home $100,000 or $150,000 year after year.
Word of Mouth Marketing (WOMM) comes from integrity-based deals that make everyone a winner.
Integrity Works Best for Cooperative Lease Option Investors
Word of mouth marketing is the most important social media – bar none other! Of course, WOMM has been around since the caveman days. But to put it in social media terms – WOMM is an organic way of spreading information that uses components of viral marketing, though unlike viral marketing, it spreads mostly by natural channels.
It’s shared by customers and triggered by an event the customer experiences. This event is something beyond expectations. Exceeding expectations is exactly the goal of cooperative lease options. According to a Nielsen study, a whopping 92% of consumers believe suggestions from friends and family more than they do advertising – this statistic alone makes the entire case for using word of mouth marketing.
Referral marketing is a major segment of WOMM.
WOMM happens every time a person talks positively about an experience with your business, whether you encourage it or not. Referral marketing for cooperative lease options goes a step further by encouraging and creating reasons for one person to refer your business to others.
This simply means that you take active steps to encourage WOMM. It all hinges on building and maintaining a warm and friendly relationship with both the buyers and sellers in your cooperative lease option deals. These relationships should be friendly and professional. Add a heaping spoonful of integrity by always doing what you say, and you have a solid foundation for WOMM.
You want to keep all your conversations sincere and open. You don’t know when a conversation you have today will become a profitable deal tomorrow, next week, next month, or two years from now. Even if you don’t close a deal today, you want the potential seller to be open to you calling them in 45 days to see if anything has changed. You build integrity by asking if you can call in 45 days and then doing exactly what you said you would do.
Also, encourage them to call you if something changes before then. Encourage them to share your information with people they know. Create a “tickle file” to remind you to call back when you said. If the answer is still no, it will be a very short conversation that is still very much worth your time. You will have reminded the prospect that you are still interested. If the house is still available or they still have a problem, that reminder could get them to call back tomorrow even if they said no today.
Ask if anything has changed. Ask if they need more information. Keep good notes so that you can show that you are paying attention to finding a deal that will work well for them. That’s integrity wrapped up in a friendly and professional conversation.
WOMM works with every one of your cooperative lease option deals.
Finding For Sale By Owner to Convert into Cooperative Lease Options
Craigslist and driving neighborhoods for dollars are the two best ways to find For Sale By Owner (FSBO) houses. No complex software or technology needed. Just like all cooperative lease options, FSBO deals begin with the right conversation that generates integrity and WOMM. Start with a brief explanation of how cooperative lease options work. Let the person talk and ask questions that are on their mind. Follow up with a quick question asking if they are open to exploring profitable creative sales options (FSBO indicates they are already open to creativity).
Encourage them to talk, so that you get their full story. One bump in the road that you want to be prepared for is if they think you are looking for seller financing. One of the beauties of cooperative lease options is that it seldom requires the seller to finance the deal and wait ten years for a balloon payment. But we are talking creativity and it does leave seller financing as a possibility if they are interested sometime in the near future. This is happening early in your conversation. You want to learn what will work well for them without shutting any doors.
Your main goal with the first conversation is to set up a face-to-face meeting. At the property is the best place to meet. Don’t overload the person with too much information on the first call. With too much information, you could talk them both into the deal and out of the deal in the same conversation. Too much information at one time might make a cooperative lease option sound more complicated than it is.
Always listen closely to the seller. With a little information from you and a lot of information from them, you will be able to craft a deal that is best for both of you.
Key Points to Helping Sellers Understand Cooperative Lease Options
One of the first things to do is confirm that you are both talking about the same house. Landlords typically have more than one house. Also, confirm that you are talking to the right person that can decide to sell with a cooperative lease option.
Ask them to talk about the property. You’ll be taking notes. Slip in short comments to show that you are interested in what they are saying with phrases like “that sounds nice” and “tell me more.” Don’t ask a bunch of negative questions. Don’t ask if repairs are needed. Instead, ask how they would improve the property if they were going to stay in the property. You’ll gain valuable insights about the house while asking positive and friendly questions.
Let them talk some more!
Ask them about what is listed in the craigslist advertisement. If it says the kitchen was remodeled, ask what was done and how long ago. Ask what was left out of the advertisement because of space limitations. Gently ask about the price. Say, “if I read the ad correctly, the price is $XXX,XXX. Is that correct?” Ask if the property was appraised today, what would the appraisal be? Ask what other houses in the neighborhood have sold for recently? You are not trying to make an offer right now. You are trying to get a feel for what they think the property is worth.
That is what you are going to do today. Make that first call to find your first cooperative lease deals. You will gain a lot of information by listening to what the seller is thinking.
You will learn the information you need to go further into detail about cooperative lease options when you meet face-to-face!
Today is the day that you find your first cooperative lease option deal that will lead to many more in the days and weeks that follow!
- Investing In Real Estate with Lease Options.
- Advanced strategies for Buying and Selling with Lease Options.
- Cooperative Lease Options.
- Working with Realtors.
- You’re Wealth Building Arsenal.
- Add Personalized Coaching.
- Expand to Get the Deed “Subject To.”
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
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