If you are in the difficult situation of falling behind on your mortgage payments and trying to sell your home, offering it on a rent-to-own basis may help you stay out of foreclosure. I wish I could say for certain, because I hate to see people lose their homes to the bank, but obviously it’s no guarantee. The last thing lenders want right now is to foreclose on your home. They have gotten pretty flexible in working with homeowners to find solutions. Be sure to include them in the process when trying to find a resolution. As you read on you can evaluate whether you think selling your home as a rent-to-own will help you. Critical factors to consider are:
* Monthly Payment Adjusting Up? If your monthly payment has adjusted upwards, will you be able to rent your home to a tenant-buyer for enough to cover the new payment? If not, you will have to cover the difference yourself or get the lender to agree to a reduced payment. There are lenders that will work with you on your interest rate. This is called a loan modification. They usually won’t change your balance but they might change the interest rate and length of loan. Talk to your lender to discuss your options.
* Home Prices Dropping? Do you live in one of the areas where home prices have dropped dramatically? If so, is your home worth much less than your current loan amount? If this is the case you won’t be able to sell it to a tenant-buyer for enough to pay off your mortgage. Do you have the extra money to pay off the difference? Do you need to consider foreclosure? Maybe a short sale is your solution versus a rent-to-own. A short sale is when you get your mortgage company to accept a lesser amount on the payoff of your mortgage than you owe, when you sell your home. This is called “shorting” the mortgage. Many people and lenders have had to consider this alternative with the housing market decline.
* Behind on Your Payments? How much are you currently behind in payments? You will need to bring them current one way or another to stop the foreclosure. The option fee from your tenant-buyer may be enough to cover this. If it isn’t, you might be able to use the option fee to cover part of it and then establish a catch-up plan with your lender.
Yes, you do have choices other than the traditional way of selling your home! Obviously this is the part where I sing the praises of rent-to-own.
Want to learn more about selling your home as a rent to own? See Wendy Patton’s book, Rent to Sell, Your Hands on Guide to Sell Your Home When Buyers Are Scarce.
View this post from it's original source here: http://www.wendypatton.com/blog/how-to-possibly-avoid-a-foreclosure-using-a-lease-option
Friday, February 26, 2010
Friday, February 19, 2010
Real Estate Investing – An Essential Tool
View this post from it;s original source: http://www.wendypatton.com/blog/real-estate-investing-an-essential-tool
Wednesday, February 17, 2010
Now You Can Get my Online Lease Option DVD for Free!
If you are like many others who have come to my site to learn how to make more money by investing with little or no money down in lease options, I have an exciting opportunity for you. I am now offering a FREE online DVD to help you Learn How to put $5,000- $10,000 into your pocket within 29 days using lease options . I am sure you may have concerns and may be wondering if it is even possible in today’s Real Estate market when you do not have:
* Enough credit to purchase a property with a mortgage
* If you do not have enough cash to buy or put down
* You do not want to get stuck with a property you can not
Take a few moments from what you are currently doing and watch.
Here is what you will learn:
* Why Real Estate?
* What a Lease Option is.
* Why you need a Lease Options.
* 6 keys to success.
Check out the Box located on the right side of my blog and get it now!!
To get your Free online Lease Options Go HERE: http://www.wendypatton.com/blog/now-you-can-get-my-online-lease-option-dvd-for-free
* Enough credit to purchase a property with a mortgage
* If you do not have enough cash to buy or put down
* You do not want to get stuck with a property you can not
Take a few moments from what you are currently doing and watch.
Here is what you will learn:
* Why Real Estate?
* What a Lease Option is.
* Why you need a Lease Options.
* 6 keys to success.
Check out the Box located on the right side of my blog and get it now!!
To get your Free online Lease Options Go HERE: http://www.wendypatton.com/blog/now-you-can-get-my-online-lease-option-dvd-for-free
Monday, February 15, 2010
The Top 3 Terms to Negotiate that Sellers MUST know for Lease Option
1. Price
Typically buyers won’t try to negotiate price. They often accept your asking price (which includes a rent-to-own premium) because of the flexibility they receive by doing rent-to-own. However, should a buyer try to negotiate on price (and they will if they read my book, Rent-to-Buy) there are a couple of ways to counter them.
1. You want to emphasize the flexibility they are receiving by being able to rent the home before they buy it. This type of flexibility justifiably commands a greater price than a comparable home being sold conventionally.
2. You want to emphasize the rarity of what you are offering. Simply put, a buyer who is buying a rent-to-own home has very few choices in homes. There aren’t that many out there. This rarity also makes the home more valuable.
2. Option Fee
More than any other term buyers will likely try to negotiate a smaller option fee. In some cases they’ll do this because they don’t have enough money saved, in other cases they’ll do it simply because they don’t want to part with the money.
Obviously the more option fee you receive the better because it means the buyer is less likely to walk away from their money. When a tenant-buyer tries to negotiate a lower option fee you can counter it by:
1. Pointing out that the option fee counts as a down payment when they are trying to qualify for a mortgage and the larger the option fee the better it will look to the lender.
2. (If the tenant-buyer has poor credit) Explain that you are taking a risk by letting someone who can’t currently qualify for a mortgage move into your home and that the option fee is your security against that risk. Tell them that the option fee conveys their seriousness about the home.
3. Closing cost contributions
Typically at the beginning of the option period tenant-buyers won’t ask for or won’t know they need to ask for help with closing costs. This usually comes up at the point when they are applying for a mortgage and discover that they need to pay them.
This is when either their real estate agent or their mortgage broker will tell them that they can ask the seller (you) to help pay closing costs. The way this is usually handled is that the purchase price is increased to offset all of or part of the closing costs. Assuming that the home will appraise for enough to cover this.
You may have done this when you bought the home yourself, it’s a very common practice. By increasing the purchase price to cover closing costs, it’s mostly a wash for you as the seller. It does end up costing you a little bit with increased taxes, commissions, title fees and so forth based on the slightly higher selling price (maybe a couple hundred dollars depending on the cost of your home).
I recommend granting this concession if you can because it gets your buyers to buy your home. The cost to you is pretty small so it’s worth it to get your home sold. If you suspect that your home won’t appraise for enough to cover the closing costs because property values are going down in your market, you may want to encourage the tenant-buyer early during the rental period to start saving some money to cover their closing costs when they get a mortgage, this way you are less likely to have to add them into the purchase price.
View this post at its original source here: http://www.wendypatton.com/blog/the-top-3-terms-to-negotiate-that-sellers-must-know-for-lease-option
Typically buyers won’t try to negotiate price. They often accept your asking price (which includes a rent-to-own premium) because of the flexibility they receive by doing rent-to-own. However, should a buyer try to negotiate on price (and they will if they read my book, Rent-to-Buy) there are a couple of ways to counter them.
1. You want to emphasize the flexibility they are receiving by being able to rent the home before they buy it. This type of flexibility justifiably commands a greater price than a comparable home being sold conventionally.
2. You want to emphasize the rarity of what you are offering. Simply put, a buyer who is buying a rent-to-own home has very few choices in homes. There aren’t that many out there. This rarity also makes the home more valuable.
2. Option Fee
More than any other term buyers will likely try to negotiate a smaller option fee. In some cases they’ll do this because they don’t have enough money saved, in other cases they’ll do it simply because they don’t want to part with the money.
Obviously the more option fee you receive the better because it means the buyer is less likely to walk away from their money. When a tenant-buyer tries to negotiate a lower option fee you can counter it by:
1. Pointing out that the option fee counts as a down payment when they are trying to qualify for a mortgage and the larger the option fee the better it will look to the lender.
2. (If the tenant-buyer has poor credit) Explain that you are taking a risk by letting someone who can’t currently qualify for a mortgage move into your home and that the option fee is your security against that risk. Tell them that the option fee conveys their seriousness about the home.
3. Closing cost contributions
Typically at the beginning of the option period tenant-buyers won’t ask for or won’t know they need to ask for help with closing costs. This usually comes up at the point when they are applying for a mortgage and discover that they need to pay them.
This is when either their real estate agent or their mortgage broker will tell them that they can ask the seller (you) to help pay closing costs. The way this is usually handled is that the purchase price is increased to offset all of or part of the closing costs. Assuming that the home will appraise for enough to cover this.
You may have done this when you bought the home yourself, it’s a very common practice. By increasing the purchase price to cover closing costs, it’s mostly a wash for you as the seller. It does end up costing you a little bit with increased taxes, commissions, title fees and so forth based on the slightly higher selling price (maybe a couple hundred dollars depending on the cost of your home).
I recommend granting this concession if you can because it gets your buyers to buy your home. The cost to you is pretty small so it’s worth it to get your home sold. If you suspect that your home won’t appraise for enough to cover the closing costs because property values are going down in your market, you may want to encourage the tenant-buyer early during the rental period to start saving some money to cover their closing costs when they get a mortgage, this way you are less likely to have to add them into the purchase price.
View this post at its original source here: http://www.wendypatton.com/blog/the-top-3-terms-to-negotiate-that-sellers-must-know-for-lease-option
Friday, February 12, 2010
Top 5 Reasons Lease Options can be beneficial for you
I’ve talked a fair amount about why you NEED to offer your home on a rent-to-own basis to get it sold in this market. But I haven’t talked at all about the benefits to you in doing so. After all, most of us hate doing things just because we HAVE to, we would much rather do things we WANT to do.
Here are some of the reasons rent-to-own can be beneficial for you:
1. Higher Purchase Price - Rent-to-own sales typically command a price premium over traditional sales. The buyer is paying extra for the flexibility he receives by not having to do an outright purchase immediately.
1. Higher Rent - You may be able to charge more for monthly rent in a rent-to-own than you would for just a straight rental. I will cover this in more detail later.
1. Cash Flow - If your monthly payments are less than the monthly rent, the difference goes into your pocket.
1. Option Fee - This upfront fee paid to you by your buyer is what secures the purchase price down the road. If the buyer closes on the home, it would be applied towards the purchase price. If the buyer elects to not purchase the home, the option fee is forfeited and still remains yours. Either way you win. If you were to just rent the home, the tenant would put down a security deposit. The option fee is different than a security deposit. A security deposit is owned by the tenant and can’t be used by the owner, except for repairing damages, unpaid rent and other provisions as mandated under state laws.
2. Eliminates the Burden of the Mortgage Payment - If you have already moved on to your next home and your old house is sitting empty while you try to sell it, then you are saddled with TWO mortgage payments. Hopefully you aren’t in this position, but if you are I feel your pain. Ouch! If the house has been taking a while to sell, you know how fast the money coming out of your pocket adds up. It gobbles up any equity you have at a frightening rate. Placing a rent-to-own buyer that pays that extra mortgage can take away your pain.
As you can see, selling your home as a rent-to-own offers a lot of benefits to you: Higher purchase price, cash flow, higher rent, option fee, selling faster and more! To learn more ways a rent-to-own can be beneficial for you check out my book Rent-to-Sell.
Here are some of the reasons rent-to-own can be beneficial for you:
1. Higher Purchase Price - Rent-to-own sales typically command a price premium over traditional sales. The buyer is paying extra for the flexibility he receives by not having to do an outright purchase immediately.
1. Higher Rent - You may be able to charge more for monthly rent in a rent-to-own than you would for just a straight rental. I will cover this in more detail later.
1. Cash Flow - If your monthly payments are less than the monthly rent, the difference goes into your pocket.
1. Option Fee - This upfront fee paid to you by your buyer is what secures the purchase price down the road. If the buyer closes on the home, it would be applied towards the purchase price. If the buyer elects to not purchase the home, the option fee is forfeited and still remains yours. Either way you win. If you were to just rent the home, the tenant would put down a security deposit. The option fee is different than a security deposit. A security deposit is owned by the tenant and can’t be used by the owner, except for repairing damages, unpaid rent and other provisions as mandated under state laws.
2. Eliminates the Burden of the Mortgage Payment - If you have already moved on to your next home and your old house is sitting empty while you try to sell it, then you are saddled with TWO mortgage payments. Hopefully you aren’t in this position, but if you are I feel your pain. Ouch! If the house has been taking a while to sell, you know how fast the money coming out of your pocket adds up. It gobbles up any equity you have at a frightening rate. Placing a rent-to-own buyer that pays that extra mortgage can take away your pain.
As you can see, selling your home as a rent-to-own offers a lot of benefits to you: Higher purchase price, cash flow, higher rent, option fee, selling faster and more! To learn more ways a rent-to-own can be beneficial for you check out my book Rent-to-Sell.
Wednesday, February 10, 2010
How to Beat the Economic Downturn – A Creative Solution
I have had the same UPS driver come to my office for the last six years! His name is Darwin, but for about the last six months I have not seen Darwin. I thought he may have hurt his back or had been assigned to a new route, in any case I have missed seeing his smiling face each day around 4:00 P.M..
Last week, Darwin walked into my office and asked to see me. I was delighted to see him again. He began to inform me of how after 25 years of service with UPS he had been laid off!
His SECURITY was GONE!
How disheartening, but yet so typical of Corporate America and of the effects of our beat-down economy. Darwin asked if he could use me as a reference. This told me that Darwin did not have a Plan B in place in case something like this ever happened. You are probably saying to yourself; “Why would he after 25 years of service? Who would have thought he even needed one?”
In a perfect world I would wholeheartedly agree, unfortunately we do not live in such a place or time.
Personally I believe we always need to expect the best but plan for the unexpected.
If you want to make sure that something like what happened to Darwin does not happen to you and your family, get started on your Plan B right now.
Join me on February 11, 2010 at 8:00 PM – EST7:00 PM – CST6:00 PM – MST5:00 PM – PST to check out a multiple stream of income (Plan B) that has worked out very well for me and my family over the last 7 years. This opportunity has provided for us when our other income sources had dried up.
Register today at https://www2.gotomeeting.com/register/553774042
See you on the webinar
Wendy
Last week, Darwin walked into my office and asked to see me. I was delighted to see him again. He began to inform me of how after 25 years of service with UPS he had been laid off!
His SECURITY was GONE!
How disheartening, but yet so typical of Corporate America and of the effects of our beat-down economy. Darwin asked if he could use me as a reference. This told me that Darwin did not have a Plan B in place in case something like this ever happened. You are probably saying to yourself; “Why would he after 25 years of service? Who would have thought he even needed one?”
In a perfect world I would wholeheartedly agree, unfortunately we do not live in such a place or time.
Personally I believe we always need to expect the best but plan for the unexpected.
If you want to make sure that something like what happened to Darwin does not happen to you and your family, get started on your Plan B right now.
Join me on February 11, 2010 at 8:00 PM – EST7:00 PM – CST6:00 PM – MST5:00 PM – PST to check out a multiple stream of income (Plan B) that has worked out very well for me and my family over the last 7 years. This opportunity has provided for us when our other income sources had dried up.
Register today at https://www2.gotomeeting.com/register/553774042
See you on the webinar
Wendy
Monday, February 8, 2010
How to Generate Leads Through Realtors
When I first started doing lease options it was about two years before I realized that I needed to work with Realtors because of their control over the sellers. Realtors pre-screen everything for you and in general their sellers aren’t in financial trouble. The Realtors control the relationship with the sellers and the sellers tell the Realtors everything, including personal information. That’s one of the key reasons I like to work with Realtors – they control the knowledge base about the seller.
I look for Realtors who can understand lease options and can help their sellers also understand the benefits of lease option, but this understanding can take time. My job is to assist them and help them understand when to call me. Here is how I generate leads for lease options through realtors.
1. Making cold calls to generate leads
If you look in any real estate section of any newspaper, you can find the top listing agents you need regarding potential properties. Many times the agent is unavailable, but that’s not a problem. Just leave a descriptive message about the property that interests you and let the agent know how to contact you. You might want to make yourself a short script with the highlights of the things you need to discuss so that you don’t fumble for words when on the phone. Also don’t be afraid to ask for information from the assistants. They often know as much or more about the status of the home and the seller.
2. Structuring the Deals through Realtors
Tell the agent how you found out about them – butters them up a bit – and let them know that you are willing to give a presentation. Suggest that the Realtor fax you a potential listing. If you have already developed a relationship with the Realtor, you can always “dig” a little during the phone conversation to see if they have a property that is a good candidate for a lease option that they might have overlooked.
A. Proposal – used to put together a mock-up offer to a Realtor that they can then present to the home owner or seller. It will put down the overall terms in writing without the specifics. This saves a lot of paperwork because you only fill out the other paperwork when you have an agreement on the proposal.
B. Letter to get into the brokerage office – I tell the broker what I do and don’t be anxious on the proposals – make it low pressure. When you’re first starting out, you‘ll want more deals to go through because there’s a great excitement in the newness of the game. Don’t get too wrapped up in a deal happening, because a lot of them don’t happen. I probably get about 40% of the proposals I put out- which means that 60% come up empty.
3. Unwanted Buyers
A Realtor will get a pre-approval letter from a mortgage company before they show a home to a prospective buyer. Otherwise they’d be wasting valuable time and energy with a lot of people who are looky-loos and not serious buyers. The Realtors don’t want to waste their time with those buyers, but those are the buyers I want and I need the names from the Realtors. So I send the Realtors a “Garbage letter” which basically says, “Don’t throw those names and numbers in the garbage! I can help the buyers get into a home with lease options. I offer a $1000 finders fee for every name that ends up in a deal.” This is another incentive to Realtors to work with me. I’m not out to steal their business – I’m here to help them and to offer a unique service to buyers with financial history difficulties. I want to help them move their inventory, so I am interested in the buyers they can’t help in traditional methods.
Working with Realtors is key in any lease option deal. For more information about Generating Leads through Realtors check out my book Investing in Real Estate with Lease Options and Subject-to Deals.
View this post from it's original source here: http://www.wendypatton.com/blog/how-to-generate-leads-through-realtors
I look for Realtors who can understand lease options and can help their sellers also understand the benefits of lease option, but this understanding can take time. My job is to assist them and help them understand when to call me. Here is how I generate leads for lease options through realtors.
1. Making cold calls to generate leads
If you look in any real estate section of any newspaper, you can find the top listing agents you need regarding potential properties. Many times the agent is unavailable, but that’s not a problem. Just leave a descriptive message about the property that interests you and let the agent know how to contact you. You might want to make yourself a short script with the highlights of the things you need to discuss so that you don’t fumble for words when on the phone. Also don’t be afraid to ask for information from the assistants. They often know as much or more about the status of the home and the seller.
2. Structuring the Deals through Realtors
Tell the agent how you found out about them – butters them up a bit – and let them know that you are willing to give a presentation. Suggest that the Realtor fax you a potential listing. If you have already developed a relationship with the Realtor, you can always “dig” a little during the phone conversation to see if they have a property that is a good candidate for a lease option that they might have overlooked.
A. Proposal – used to put together a mock-up offer to a Realtor that they can then present to the home owner or seller. It will put down the overall terms in writing without the specifics. This saves a lot of paperwork because you only fill out the other paperwork when you have an agreement on the proposal.
B. Letter to get into the brokerage office – I tell the broker what I do and don’t be anxious on the proposals – make it low pressure. When you’re first starting out, you‘ll want more deals to go through because there’s a great excitement in the newness of the game. Don’t get too wrapped up in a deal happening, because a lot of them don’t happen. I probably get about 40% of the proposals I put out- which means that 60% come up empty.
3. Unwanted Buyers
A Realtor will get a pre-approval letter from a mortgage company before they show a home to a prospective buyer. Otherwise they’d be wasting valuable time and energy with a lot of people who are looky-loos and not serious buyers. The Realtors don’t want to waste their time with those buyers, but those are the buyers I want and I need the names from the Realtors. So I send the Realtors a “Garbage letter” which basically says, “Don’t throw those names and numbers in the garbage! I can help the buyers get into a home with lease options. I offer a $1000 finders fee for every name that ends up in a deal.” This is another incentive to Realtors to work with me. I’m not out to steal their business – I’m here to help them and to offer a unique service to buyers with financial history difficulties. I want to help them move their inventory, so I am interested in the buyers they can’t help in traditional methods.
Working with Realtors is key in any lease option deal. For more information about Generating Leads through Realtors check out my book Investing in Real Estate with Lease Options and Subject-to Deals.
View this post from it's original source here: http://www.wendypatton.com/blog/how-to-generate-leads-through-realtors
Friday, February 5, 2010
What is a Cooperative Lease Options
Learn what a Cooperative Lease Option is and how to make a profit from the deal.
View this post at it's original source: http://www.wendypatton.com/blog/732
View this post at it's original source: http://www.wendypatton.com/blog/732
Wednesday, February 3, 2010
How to Make a Profit from a Sandwich Lease Option
Learn what a Sandwich Lease Option is and how to make a profit from the deal.
http://www.wendypatton.com/blog/what-is-a-sandwich-lease-option
Learn what a Sandwich Lease Option is and how to make a profit from the deal.
http://www.wendypatton.com/blog/what-is-a-sandwich-lease-option
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