Risks in lease option investing

Yesterday, I talked about 5 advantages to lease option investing. To be fair, today I'm going to look at some of the risks associated with lease option investing and how to manage them.

The biggest risk in lease option investing is the possibility of the seller having a problem financially, either paying their mortgage or property taxes or some other event that results in a lien against the home. This can be a problem because it can prevent the seller from selling the home when it comes time to close the deal. So how do you manage this risk? First, check to make sure the seller is solid, always pull title work on the home. Second, record a memorandum of option. Third, get a signed bank authorization from the seller so you can contact their lender directly to verify payments are being made - or insist on making the payments yourself and sending verification to the seller.

There is also the risk of the tenant buyer you place in the home not paying their rent. If this happens you need to take the proper steps to evict, don't dawdle on this, get the process started right away. The buyer can always catch up, but you can't make up for lost time if you delay by listening to sob stories from the buyer. You can manage this risk by doing proper tenant-buyer screening. Don't go by gut feeling, do the proper screening to make sure you are putting a solid tenant into the property.

Like any kind of real estate investing there are always some risks involved, but the big advantage you have with lease option investing is that you don't have to close on the deal. It's an option, meaning you have the option to buy, not the obligation.

View this post at it's original source at http://www.wendypatton.com/blog/risks-in-lease-option-investing

5 Advantages to Lease Option Investing

Here are 5 great advantages to lease option investing:

1. Little to no money down investing. Whether you are buying from owners directly or through Realtors, there is little to no money down required to buy a lease option
2. Little to no risk. If you're buying a house on a lease option, you also maintain the right not to buy it. This, to me, is the best benefit of lease option investing. If the market goes up you can buy; if it goes down you can try to renegotiate or you don't have to buy.
3. No qualifying. In most cases with lease options you will never have anyone ask you for your income or credit information. This is done by building rapport with the seller or the Realtor.
4. You can buy them with your IRA. This is a little more advanced concept but you can buy lease options with your self-directed IRA. This allows you to get your profits tax free! You need the right type of IRA and the right IRA management company. I use Equity Trust.
5. The seller will love you. The seller will be thrilled that you helped them with their situation. The won't be able to thank you enough if you looked for a solution that was a win-win.

These are some of the reasons that I love doing lease option investing.

View this post at it's original source at http://www.wendypatton.com/blog/5-advantages-to-lease-option-investing

Subject To Investing - One of my favorite contract clauses

When it comes to real estate investing and contracts, whether it is lease option investing or subject to investing or any other type of real estate investing, it's always good to use contracts that include clauses giving you additional levels of protection. Standard real estate contracts were never really mean for special real estate deals.

For example, one of my favorite clauses to include in my subject to contract is this seller acknowledgement:

We understand that the purchaser is a real estate investor and intends to resell the property at some future date and expects to make a profit.

I make certain that the seller writes their initials next to all of the special clauses in my contracts indicating that they understand the deal. Lay it all out there. Yes, you are a real estate investor. Yes, you intend to resell the home later and make a profit. This is only right and fair, you aren't running a charity. Your goal is to help the seller and make a fair profit.

In subject to investing I do not advocate taking advantage of a seller or trying to make an obscene profit. The deal should be a win-win for everyone. By having the right clauses in your contract, like this one, the seller is acknowledging that they understand that you are a real estate investor and will be making a profit from this. There is no point in hiding that.

View this post at it's original source at http://www.wendypatton.com/blog/subject-to-investing-one-of-my-favorite-contract-clauses

Lease Options - Handling Seller Objections

"What if the tenants trash my home?"

If you are a lease option investor you can expect that many home owners may ask this question when considering a lease option. If the seller was considering renting out their home anyway then they've already handled this risk for themselves.

However, if they ask this question of you here is the response I like to give:

"I can understand why this would be a concern to you, but I want to assure you that I really do screen my tenants carefully. I am putting not just any tenant in your home - I am putting a future home buyer in your home. but if anyone does any damage to your home, then I would take care of it. I am fully responsible for your home."

If they need further assurance you can let them know that their lease option home is also your investment, so you're looking out for it very carefully.

Remember, learn to love when sellers raise objections, it means they are seriously considering your offer. To learn more about lease option investing visit my website.

View this post at it's original source at http://www.wendypatton.com/blog/lease-options-handling-seller-objections

Advertise your home for lease option

Whether you are a home seller, a real estate agent or a real estate investor you should be using Craigslist to advertise your home as a lease option or rent to own. I do almost all my advertising exclusively on Craigslist now and generate tons of good rent to own buyer leads.

It's free, it's easy and the competition (at least in my area) is low. Buyer's look here though and it has served as a powerful lead generator.

Here are two sample ads I have used:

Ad 1:

$2195/4 BR - Great Home on Rent to Own (Wayne)

A great home in Wayne on a Lease Option/Rent to Own. Call today to find out more how I can help you. I help buyers find lease options or contract for deed homes. Working with buyers that have credit issues is my specialty. Own a home even if you need some time to improve your credit. STOP RENTING! There are no fees to you for my service. Wendy at Keller Williams Realty, you can email me at wendy@wendypatton.com - You will need a minimum of $10,000 to get into a home with this type of transaction. I look forward to working with you soon to buy your new home.

Ad 2:

$1695/3 BR - 3/2/2 in Great Area - Lease Option (Clifton)

Clifton great home with 3 bdrms, 2 baths, and a 2 car garage. Nice area. Lease to own with $7,500 down. Credit problems ok. My specialty is working with buyers who have less than perfect credit :-) There is no fee to you. Email me today, Wendy at Keller Williams, wendy@wendypatton.com

Both of these ads have drawn solid responses from lease option buyers. If you are a real estate agent or a lease option investor you can use these ads even if you don't have a lease option home available yet. Once you get the buyer leads then you can find a lease option home that works for them.

View this post at it's original source at http://www.wendypatton.com/blog/advertise-your-home-for-lease-option

Blastoff replay now available

If you missed last night's webinar you missed out on a great opportunity to learn how to generate passive monthly income - free.

Fortunately you didn't miss out on your chance to participate though. The replay link is now available, you can view the webinar at www.wendypatton.com/blastoff

This is truly a pre-launch opportunity with a short time window to get in before it's released to the general public. Blastoff is a fun way to generate passive monthly income. It's free to participate and you don't have to sell anything to anyone.

As soon as you see this webinar you'll say to yourself, "of course I want to be a part of this, I have nothing to lose." Opportunity is knocking here and I want everyone to be able to take advantage of this. Do yourself a favor and dedicate the small amount of time to watch this webinar - www.wendypatton.com/blastoff

In our current troubled economic times it never hurts to find additional ways to generate income. But it's really special when we can find a way that's fun, easy and free.

I know that there are some people out there who are thinking this sounds too good to be true and so they won't even bother watching the webinar. I can promise you that come October 13th when this is released to the general public and you see the massive marketing effort Blastoff makes you are going to wish you had taken the time to watch this. We are in a pre-launch situation that gives us a very special opportunity to get in at the very beginning.

We are also doing a special encore webinar live on Thursday night at 8PM EST. You can register for that webinar at https://www2.gotomeeting.com/register/533701803

View this post at it's original source at http://www.wendypatton.com/blog/blastoff-replay-now-available

Do you need cash flow but have no cash?‏

This is your last chance to sign up for this special webinar event that will help you generate monthly passive income.

I mentioned before that this opportunity is free. Did I also mention that it doesn't require sales on your part? That's right, you don't have to get out there and try to sell products or anything like that.

That's what makes this internet opportunity so special, so big. It's so easy!

Sign up now at https://www2.gotomeeting.com/register/993413859.

The webinar is TONIGHT at 8 PM EST.

It doesn't require people to make big changes in behavior. It doesn't require them to buy things they wouldn't normally buy. No it is NOT AMWAY! AMWAY costs money and I said this is free.

It's one of those things that is both so simple but so powerful that once you see it you'll understand.

When I say it's free and there are no strings attached and I know it sounds too good to be true, once you see it Tuesday night you'll understand. It's one of those "aha" moments and then you'll start getting really excited. As excited about this as I am.

I want to share this with everyone I know because everyone can benefit from it.

I am so excited for this webinar tonight. I want you all to be there to have a chance to be a part of this.

Remember it's at 8PM EST tonight. Sign up now so you don't miss out on this great opportunity to generate passive monthly income.

Sign up at https://www2.gotomeeting.com/register/993413859

View this post at it's original source at http://www.wendypatton.com/blog/do-you-need-cash-flow-but-have-no-cash

Has Real Estate Burned You Out?

All I can say is I understand how you feel. I love real estate but it has burned many people in the last few years and we are all looking for new ways to make money. Real estate is great right now, but you might also need, or want, some additional cash flow. If this is you, read on.

I know of a new passive monthly income opportunity that just blows me away! It's just plain awesome.

Wow, because the response from the first email has been fantastic.
Space is limited for this webinar and I can't promise that we'll have room for everyone. You definitely don't want to wait to sign up for this because it is just too good of an opportunity to pass by.

The webinar is Tuesday, September 22, 2009 at 8 PM EST.

You can sign up at (click on this link):

https://www2.gotomeeting.com/register/993413859

Wow, because this is truly one of those times that opportunity is knocking and we have a chance to act. This is a very special opportunity because we are being given a chance to participate before anyone else. The general public can't do it yet.

Imagine if you had a chance to jump into some other opportunities when they first came up. How ahead of the game you would be once the general public caught on and it exploded in growth.

Imagine buying Microsoft stock when it was first released.

Imagine buying real estate in an emerging market before anyone else knew it was about to boom.

This is that kind of opportunity, but there is one big, BIG difference. This one is absolutely free. FREE.

I have already seen it and I promise you that there isn't some hidden catch.

When opportunity knocks we need to take action and this is definitely the time to do so.

It's September 22 at 8 PM EST. Make sure you are there!

Sign up here https://www2.gotomeeting.com/register/993413859

see you then

View this post at it's original source at http://www.wendypatton.com/blog/has-real-estate-burned-you-out

A great source of passive income - absolutely free!

Greetings from Wendy Patton,
I know that with a headline like that you are thinking, "what's the catch?" There isn't one.

Next Tuesday, September 22 at 8PM EST we are doing a special webinar event on a new opportunity that hasn't been released to the general public yet, but will be in less than 2 weeks.

You can register now at https://www2.gotomeeting.com/register/993413859

It's absolutely free. There are no sales, that's right you don't have to sell anything.

This opportunity is a great way to earn passive, monthly income without having to buy any course, without having to sell anything to anyone. Best of all it's fun!

You definitely don't want to miss this webinar.

I don't want to spoil what's coming so I'll only give you a hint. This opportunity is internet related and is available for anyone - not just real estate people. It's a chance for you and everyone you know to earn passive income, without having to change your internet habits. It's bigger than Facebook and Twitter combined.

It's going to go public in less than 2 weeks and BELIEVE ME you want to be ahead of the curve on this one. Remember, it's absolutely free.

I know it sounds too good to be true, but I've already seen it and I promise you that you don't want to pass this opportunity by.

Space is limited for this webinar so you definitely want to sign up now. It's September 22, 2009 at 8 PM EST.

Sign up here https://www2.gotomeeting.com/register/993413859

View this post at it's original source at http://www.wendypatton.com/blog/a-great-source-of-passive-income-absolutely-free

Stop Paying Uncle Sam - Learn about Go Zone!‏

Today is September 17th. As you most likely know by now, we are hosting a webinar this evening that very well could change your life. We have only a few slots still available for this exciting and informative event. If you want to learn about combining the strongest tax benefit ever offered by the Goverment and positive cash flow, you will not want to miss this webinar.

CLICK HERE to immediately reserve your spot!

In times like we have been facing, knowledge and creativity are the keys to success! Both keys will be handed to you on September 17, 2009.

You can make the time to be on this webinar or you can make excuses, but you cannot make both.


To Your Success,

Wendy Patton & Mark Prinz

Date: September 17, 2009
Time: 8:00 PM - 9:00 PM (Central)

https://www2.gotomeeting.com/register/257565834

To view this post at it's original source go to http://www.wendypatton.com/blog/stop-paying-uncle-sam-learn-about-go-zone

Now is the time to take action

Real estate investors across the country right now are buying up as much property as they can.

Why?

Because we are having a fire sale on real estate right now. There are some areas in the country where prices have dropped to 1994 levels! Investors are buying up everything they can because you want to buy low and sell high - and believe me prices are low right now.

If you are interested in real estate investing now is the time to act. But most investors right now can only qualify for a few mortgages before they hit the cap. A few investment properties just isn't good enough for me. That's why lease options and subject to investing deals are such excellent choices. You don't need to get a mortgage. Lease options and subject to investing deals are also excellent because they require little to no money down. This makes them a great choice for beginning and seasoned investors alike.

I've been a real estate investor for a long time now. I have never seen opportunities like the ones going on right now.

This is not the time to dream about getting into real estate investing. This is not the time to make excuses about why you can't do it now. This is the time to act. Get started by learning how to do lease options and subject to investing deals. Take action and change your life for the better!

View this post at it's original source at http://www.wendypatton.com/blog/now-is-the-time-to-take-action

Go Zone Event

If you want to learn about empowering your investments dollars using the GO ZONE Tax benefit and creating positive cash flow, you will not want to miss this event.CLICK HERE to immediately reserve your spot!

Investing in today's real estate market requires creative approaches to buying real estate. As we have all been taught, 'BUY LOW and SELL HIGH!!' The current real estate market is presenting us with outstanding opportunities to buy. Unfortunately many investors do not know or fully understand how to capitalize on the most aggressive tax benefit the government has ever offered to the real estate investor.

The Good News IS, when you attend the webinar on September 17, 2009, you will be one of the people that will know and be empowered by the knowledge that you will gain.

The Bad News Is, this opportunity is fleeting and the window of opportunity will not remain open much longer.

Join us for an exciting webinar to learn about the most exciting Tax benefit ever offered to the real estate investor in the last 100 years! This benefit is available in the Mississippi gulf coast area and the benefit for you and your clients are matched by none. The GO ZONE allows any qualified purchaser to depreciate up to 50% of the purchase price of the subject property in the first year the property is placed into service; this is done to offset your other gains.

Another benefit to you the investor is you are investing in one of the strongest real estate markets in the United States. Biloxi, MS was ranked "#1 hottest market" in the US by Realtor.org in 2008 and was recently featured in CNN MONEY MAGAZINE.

To register now and learn more about this opportunity, click the link below:

Click here to register!

Hanover Companies has been in the business of real estate investing for 40 years as advisers, fund managers, developers, and consultants and has designed an investment program for today's challenging market conditions. ??All of Hanover's Real Estate Investment Properties come with the option of their "Total Leasing Program" - giving you a full rental income for up to 30 months and leaving you CASH-FLOW POSITIVE on a monthly basis. This care free program covers:

• 100% of your mortgage payment
• 100% of your property taxes
• 100% of your homeowner association fees and dues
• 100% of your management fees
• 100% of your maintenance costs
• 100% of your utilities.

If you would like to learn more about the GO ZONE BENEFIT and the "Total Leasing Program" that Hanover can offer you, then please join us September 17, 2009 for a complete overview of this outstanding opportunity for the real estate investor.

There may never be another opportunity such as this in our lifetime!

To Your Success,

Wendy Patton & Mark Prinz

Date: September 17, 2009
Time: 8:00 PM - 9:00 PM (Central)

https://www2.gotomeeting.com/register/257565834

To view this post at it's original source go to http://www.wendypatton.com/blog/go-zone-event

When to leave your job to become a full time real estate investor

If you want to pursue real estate investing, and in particular lease options or subject to investing deals, I don’t advise quitting your job and starting with nothing. Instead, I offer two pieces of advice:

1. It is best to start this business while you are still employed at your current job so that you won’t have to worry about receiving a paycheck while you are learning the business.

2. Begin to build a second income that can eventually replace your primary income when you are ready to leave your job.

Too many people leave their jobs too early, only to find out they have to go back or can’t survive without the income. Don’t make that mistake. Whether you are investing in lease options or doing subject to investing deals or any other type of real estate investing it takes time to learn the business and build up your income level. Don’t get fooled by those late night infomercials that make you think you’ll make a million your first month or even your first week as a real estate investor. This is NOT a get rich quick scheme. It takes time.

View this post at it's original source at http://www.wendypatton.com/blog/when-to-leave-your-job-to-become-a-full-time-real-estate-investor

Handling Lease Option Objection with Selling Price

"I must get my asking price or I'm not selling"

Every lease option investor will hear this objection from a home seller at some point during their lease option investing career. Probably one of the most common challenges is getting the seller from "La-La Land" to reality!

Sellers usually think rigidly about pricing - they have a specific figure in their head and they don't want to budge from that.

First you need to verify that their asking price is within true market value, not just for right now, but for where you market is likely to be at the end of the lease option period. This is particularly true for declining markets. The best way to do this is do get accurate comparables for the home.

The deal must be a win-win-win for you, the lease option seller and the lease option buyer. If the seller's asking price is too far out you'll need to show them the comparables and try to get them to acknowledge reality.

The most important thing to keep in mind when dealing with a seller who is fixated on price is to remember that you have a lot of other terms you can negotiate to still make the deal work for you. Just make sure the seller has enough equity for the deal to work.

Give them their price, but make sure the option period is for a long time and get a high dollar amount on your monthly option credits. If they don't want such a long lease option term than make sure your monthly payment is low (with full option credits) so that you can generate a high monthly cash flow.

Too many investors turn down a deal flat out if the seller's price won't work for them. Just remember that you have plenty of choices with other terms when putting together a lease option deal.

View this post at it's original source at http://www.wendypatton.com/blog/handling-lease-option-objection-with-selling-price

Wendy Patton's soft market investing boot camp is coming

Wendy Patton's Soft Market Investing Boot Camp is coming November 19th - 22nd.

This is a training opportunity like no other. Books are great, reading course materials is better but nothing, NOTHING compares to getting actual, live, hands on training. If you are looking to be a real estate investor in this real estate market you don't want to miss out on this training.

Here are 5 reasons why this training is different from any other real estate investing training out there:

• Reason #1: We do deals in the room, during the event.
  You will hear me on speakerphone with real estate agents, brokers, mortgage lenders and property owners. This will not be theory, it will be hands-on and in turn, you will know exactly what to say to a Realtor or a Seller when you leave my Boot Camp. This is education on what is working right now in this market!

• Reason #2: I'll even start your deals off for you, right at the event.
  It doesn't get any better than that!
  Before you come to the event, I want you to grab some newspapers and those real estate catalog/listings they have at the supermarket, and bring them, along with any other information you have on your market.
  At the event, we'll analyze that information together. I'll tell you what techniques will work best in your specific market, for the deals being offered to you right now. In fact, I'll even call on some of the ads you bring, along with real estate agents, or sellers in your market. All of this will be done live right from the room! You'll see and hear EXACTLY how the deals are done.

• Reason #3: When you leave my Boot Camp you will know what strategies work today - RIGHT NOW!
  In today's market, many of the techniques and systems that have worked in the past are no longer practical. When you leave my Boot Camp, you will have a clear and concise understanding of what techniques are the most profitable and when to use them. The ideas and concepts that you will be shown at my Boot Camp, when applied, will pay for the cost of the Boot Camp many times over.

• Reason #4: We will focus on the 4 Most Powerful Strategies in Today's Market.
  You will learn first-hand how to invest using Lease Options, REO properties, Foreclosures, and Subject To's. I am gathering my team of experts that will be going over the in's and the out's of these particular strategies, how to use them, and when!

• Reason #5:Cash Flow is King! Discover how to capture this elusive prize.
  Simply put, cash flow is what creates financial freedom. Learn the best strategy in today's market, which will give you this sought after reward. Learn how to purchase opportunities that will keep the cash flowing into your pocket like water out of a garden hose.

Space is running out quickly for this special event. Wendy Patton's last Soft Market Investing Boot Camp was sold out.

Remember this training event is November 19th - 22nd. You don't want to miss it! To learn more about Wendy Patton's Soft Market Investing Boot Camp follow the link.

To view this post at it's original source go to http://www.wendypatton.com/blog/wendy-pattons-soft-market-investing-boot-camp-is-coming

Are you Tired of Tenants and Toilets?

Aren't you tired of tenants and toilets? Hear how my guest tonight created $10,700 per month positive cash flow his first year in the business.

I already told you how my first private money lenders made their money. this is how my guest made his, too. Self Storage Facilities that he manages remotely from the comfort of his own home (or local coffee shop). The facilities he owns are spread several hundred miles apart.

I am telling you that I have been blown away by the benefits he teaches on self storage that I never knew existed! This guy is really on to something! Even the banks agree that self storage investments are cash cows.

As a result, we have had to add some extra phone lines to handle all of the call registrations.

Whatever you have to do to be on this teleconference cal you need to do it. Believe me when I say you cannot afford to NOT be on this call.

To guarantee your spot on the call go to Wendy Patton events and click on the self storage investing registration.

This self storage investing webinar is tonight at 8 PM EST, register now at Wendy Patton events.

See this post at it's original source at http://www.wendypatton.com/blog/are-you-tired-of-tenants-and-toilets

Learn how Wendy Patton's private lenders made their millions

When I first began investing back in the 80s, I had a couple who financed millions of dollars of my real estate deals. They were great - it was a win-win situation. Recently I was talking with my upcoming webinar guest and it hit me - this is how that couple made their money that they could loan to me! Self Storage units. I can't believe I didn't jump on this sooner!

Because I am constantly on the look-out to share cutting edge information with you, I am excited to have a guy who created a $10,700 positive monthly cash flow in real estate without any tenants or toilets his very first year in the business! How could that be you ask? He has created his fortune in Self Storage, and he now owns several properties and thousands of units located several hundred miles apart, and he manages them all remotely with the aid of the internet and self service kiosks1 I just had to learn more about this incredible opportunity, so I invited him to share his system on an upcoming call. I have heard about people using technology to grow and put their business on auto pilot before, this week's guest is living proff that you can start with no experience, credit or cash using his 6 steps to creating wealth with self storage system. It is truly a turn key real estate investing business in a box!

This webinar event is Wednesday, September 9th at 8PM EST. To sign up go to Wendy Patton events.

You don't want to miss this education, packed with information call.

Register now at Wendy Patton events.

See this post at it's original source at: http://www.wendypatton.com/blog/learn-how-wendy-pattons-private-lenders-made-their-millions