Megan

"Re(1):Sunday Seminar" , Sun 6 Aug 09:51

I would like to add one thing about our having held that property. We did agree to hold it for them for $500 cash, but we did not take our ads out of the papers nor remove the sign from the yard. In essence, we continued our marketing efforts, only agreeing not to sign anything with anyone else during the specified period of time. We did, however, show it and take applications.

With these factors in mind, I consider it, to some extent, as though we gained $500 for doing what we would have been doing anyway. Yes, a couple of buyers did come along during that time claiming to have more money, but I have quickly learned that when buyers sense competition, they have a tendency to promise themselves into the poorhouse (assuming they aren't already there). Would these suppposedly cash-laden buyers followed through had they not been aware of other buyers already in line? Who knows, but I'm not going to sweat it.

Al and I are steadily assuming the position that when "disaster" strikes, we will make it a point to discover how it must actually be a blessing in disguise. In this case, this couple may have been able to come up with the Option consideration, but very likely may have defaulted later on in the middle of it. I'd rather pocket $500 cash now than have to remind them that their Option consideration and payments, etc., are non-refundable after they default a year from now and are bitter.

At the very least, that $500 covered one months payment on our end. Not bad. I'd take $500 from defaulting buyers every week of the year and never sell the place. HA!

We'll keep ya'll updated on what happens on our extended L/O sale adventure. Thanks for listening!
Megan

Doug Pretorius

"Re(1):Sunday Seminar" , Sun 6 Aug 08:44:

Next time, first come first serve, but the investor waits for no one :)

This does bring up a question. Just how easy is it to L/O average properties like that one? I admit I'm a bit nervous about getting a property and not being able to get someone in!

Doug

[this message was edited by Doug Pretorius on Sun 6 Aug 08:45]

lynnhahn

"Re(2):Sunday Seminar" , Sun 6 Aug 10:41

Selling on lease-option is pretty much like selling lemonade in the Sahara.

Only exceptions that we have found are:

1) Asking way too much (down, monthly etc.)
2) Expensive homes take longer to sell, but I have never been stuck with one.

Lynn

Doug Pretorius

"Re(3):Sunday Seminar" , Sun 6 Aug 11:06

lynnhahn

"Re(4):Sunday Seminar" , Sun 6 Aug 11:37

It's really hard to gauge. In my area a $135K house would bring between $1200-$1300 per month, so your numbers look pretty good to me. You just have to get to know your area, and it looks like you have a handle on it.

3-5% option consideration is common. We shoot for 5%, but we are sometimes willing to take 3% up front with payment arrangements to pay the other 2% within a short amount of time.

If you make the price too high people will think you are trying to rip them off. Just because they are motivated buyers doesn't mean they are stupid.

We personally try to do one year lease-options, but never more than two.

Lynn

Megan

"Re(4):Sunday Seminar" , Sun 6 Aug 11:29

Just to add some more info re. our selling approach on this one:

FMV is approx. $50,000
selling on L/O:
Asking: $53,000
5% down
payments of $600 mo. (less than market rent)

We've had it about a month now but can't find buyers with the 5% down, which I don't intend to be flexible on. I think we're offering a solid opportunity, not gouging anyone in the process. Would you say that a month is taking too long on a low-end house such as this?

By the way, the house is in great shape, needing only updating in the kitchen. Main problem I can see, it's not the best neighborhood, but it's not going to be in this price range.

Megan