Owner is interested in lease to own, straight sale, etc. WHAT TO DO NEXT?

I would love to help you out with this one but you did not tell us what your ad reador what he was responding to. o please include that and it will give me a better idea of how to respond

I have pre-qualified renters who are seeking properties in your area.
If you want to sell your home in 30 days without any closing costs, and want to be
headache free of property management contact me today. Email me and I'll show you
how you can get a check every month stress-free. If you are new to lease purchase
I'd be happy to guide you through the whole process.

So you are advertising lease option assistance.

Call them up TODAY....and explain to them wht lease option is and how it works. Get all of the info on the property that you can then set up a face to face meeting for early this week the sooner the better. Go over all of the info you discussed on the phone then get them to sign a general agreement giving you the authority to market and show their property and clearly show what your fee will be for it. School yourself on this by reading everything in the forum on lease options.

If after you talk with them on the phone, you want to com back to this and post the outcome, maybe I can lend a hand on what you should do to prepare for the face to face.

what you just put optionor and optionee together and charge a fee, i'm by no means really "new" @ this and i haven't heard of ANYONE doing this? Ant, you said "the buyer and the seller sign an agreement,like a purchase and sale agreement?

I just spoke with the owner. This guy wants to do the lease option with me, I go find the renter and rent it out the property for 6 years and then after 6 years I have the option to buy. Now what do I do? How do I make money on this? This guy is even willing to drop the price from $295,000 to $280,000 and says I can do the repairs with it. This is my very first real estate deal and I appreciate all the help, please tell me how to proceed and what contracts I would need. I need to send him some contracts today and I don't even know which one's to send.

What is the property like? Is 280,00 a good deal or not? What kind of work does the property need. Does he want a down payment... How much money a month does he want?

Just some questions to ask yourself and the owner.

Research the comps. Find out everything. Do title search. Contracts are on this site.

As jrgnsn said, Do the necessary research, even though it is exciting approaching your first deal, be careful. If all goes well, then full speed ahead. All The Best.

Sandra

Does the 6 years mean that you (or the lessee) are locked into a lease agreement for the whole 6 years? Can you purchase before that time? The property would more than likely appreciate in value within 6 years, therefore locking up today's FMV would be to one's benefit. BUT what is he asking for rent payments right now? Does it make your deal feasible? And is he asking a fair price to start with?

Get ALL the info you need before you sign any contracts. Make a VERY informed decision. (It might turn out to be a good deal, but even if you have to let it go after due diligence, it will still be a learning experience and you'll be glad you made a knowledgeable decision.)

I wish you the best with your REI.

Rina

well first your going to need to send him a "residential lease cotract with an option to purchase", and i'm pretty sure they do have generic ones on this site, just look under "forms and doc's", it's hard to understand your post, are you saying that: you are lease optioning a property that you own to another buyer for 6 years!, are you sure you really want to do that? 6 years is a long time, if i were doing this deal, i would do a lease option for no more than 2 years with the seller giving me "the right to extend" for an additional 4 years, if needed.(thats if i wanted to do a lease option for 6 years, which i would NEVER advise) why would you want to do a lease option for 6 years?

No, the seller is doing the lease option with me Sully. Which means if I want I can purchase it in 6 years for the price I want today. Most likely 6 years from now that property will increase in value that the difference between now and then would be my profit. Here is the property information:

HERES HIS EMAIL:

As you can see, the pictures are of the outside, as well as the second floor unit which is the one we updated / rehabbed. I don't have pictures of the first floor or basement just yet (they are at the store being developed). I will send those to you soon.

The first floor has the same layout, but has older hardwood floors and carpet. The appliances, counters, cabinets, etc need some updating as they look outdated (still work, just old). The lady on the first floor did not want me to update her unit, as she did not want to move her stuff in and out, so I left it.

The basement is a Full basement and partiallly finished. It is "technically" Finished, but it needs some work, so that is why I am saying partially finished. However, it does have 3 bedrooms, a bathroom, and a full kitchen.

I will lay out the details below for you as well.

Type: 2 Flat

Year Built: 1928

12 Rooms

6 Bedrooms

2.0 Baths (with additional Bathroom in Basement and Attic)

The Flats style residence contains 2,481 square feet of

Gross Living Area.

First Floor and Second Floor Units are 3 bedrooms, 1 bathroom, living room, dining room, and a kitchen. Also has an enclosed porch. Livable are of both floors is 1,240 sq. ft. each

Approximate neighborhood boundaries are; 63rd Street to the north, 71st Street to the south, Western Avenue to the east and

Kedzie Avenue to the west.

Located in an older established neighborhood consisting of single family dwellings and multi-units displaying an average to good level of maintenance. The property is in walking distance to Marquette Park, Holy Cross Hospital, has good access to employment centers, schools, shopping, public transportation and all urban amenities.

The property is a two story brick two unit with a finished attic for additional living, finished basement, enclosed vinyl sided porch and a vinyl sided two car garage. The subject property is serviced by 2-100 AMP power panels with circuit breakers, two forty gallon water heaters (recently replaced), and two hot water furnaces (recently replaced). The attic, although finished, is not heated and therefore not included in the gross building area. The first floor has carpeting, hardwood floors in two bedrooms, bath with ceramic floor and ceramic wainscot, kitchen with wood cabinets, vinyl tile floor. The second floor has new hardwood floors throughout, bath with ceramic floor and ceramic wainscot, kitchen with new cabinets, new floor tile. The basement has related living with three bedrooms, living room, kitchen and bath with vinyl floor and shower enclosure.

Do I need to a contract to have permission to market this property to find a renter? If so what contract is it? Also will the second contract (lease option) lets say I don't want to buy it 6 years from now am I stuck and so I HAVE to PURCHASE it? Also please tell me what you think about my last message on the property details does it sound like something good or not? I can send pictures too if you give me your email addresses(s).

Do you know what he is currently renting the space out for? Have you figured comps on both the property and the rents you can expect to receive? These will be very important numbers to consider, to see if the building will cash-flow and make it feasible to do a lease option.

Rina

P.S. It sounds like a very nice building.

The guys gave you great questions to ask and things to think about. The property sounds nice.

1. Check comps
2. Checck title
3. Check rents in area and rents on property
4. I suggest doing a 2-3 lease with 2 renewable options if you want to go
long term. But only if you are locking in todays FMV.
5. What are terms of financing at time of exercising option, will they owner
finance or do you need to get your own. If Owner finance, spell out the
interest rate, length of time, payment amounts, etc.
6. On the initial lease make sure it says you can sublet and also sign it
and/or assigns just in case you want to walk away and sell it to someone
else.
7. If requiring downpatment then this is a lease purchase not lease option.
Terms are a little different so make sure which one you are getting.
8. In contract the owner should still be responsible for major repairs until
option is exercised, but if he is allowing you to make repairs negotiate a
better price. Even though you are taking the option for a few years down
the road you may find someone to take it off your ands tomorrow and if the
price is just under FMV or right at FMV you will make no money. So get it
as low as you can.
9. Take your time and inspect property. List all repairs and track and keep
receipts for any you make.
10. Make sure any money you pay over the lease amount that is going toward
the option is held in escrow account.

Hope this helps.

I think the six years would be way too long. Normally you want to do a two years lease option with an options to extend 1, 2, or 4 more years if you want. Good luck and just follow Anita's lead. She's giving you step by step of what to do. If he ask for down payment, don't pay him more then the rent payment.

LL

Basically saying the same thing, but make sure it's a good deal to start with, lease option or not. Do Anita's steps 1-3 before deciding anything.

Good luck,

Rina

wow, talk about a BIG response, see what i'm talking about with the 6 years being tooo long? ant, Rina, and lloyd agree to do a 2 year MAX lease option with the "right to extend twice", we ALL know that 6 years from now the market will be in a MAJOR "UP SWING", but, "WHAT IF", hear what were saying, you just NEVER know, so have an exit after 2 years, and if you want to extend then do so.

As for the correct contract: you'll want to have you and your seller sign a "RESIDENTIAL LEASE WITH OPTION TO PURCHASE" and i would also strongly advise to take Ant's advise as to the "TERMS" of the LEASE, you will NOT be obligated to purchase the property by signing this type of a contract.

Listen to the Superstars here, two years is a reasonable time frame for the buyer to get their own financing which is why most people do a lease option. You will use the standard lease option agreement for both the seller and the end buyer. Good luck and keep us posted!
God bless,

There has been no talk about an existing loan on the property.... Banks take a dim view of a new buyer without being paid off, especially if they lease it over 2 yrs. I hope it's free and clear!

I just received and email tonight with a very similar situation. Except I am helping the owner find someone to Lease purchase or option and I charge a fee. My question is do I still run the comps,the title and comparible rent? Where can I get this info I am still looking for a realtor to work with so I don't have one available yet. It is a 4 bedroon 2.5 baths. He is asking $185K he said it appraised for $201K. They are asking $1500.00 per month.

I just spoke with the owner. The term is going to be for 6 years that neighborhood isn't the best place to be. I do have to make some repairs (never done this before need help) I convinced the owner to give me 20-30K or more depending on repairs he is willing to give me whatever it takes to get this place better. He lives 6 hours away so he is willing to pretty much do anything. He even agreed to pay me to manage the property for the 6 years so I can make additional income until the term is over. Any recommendations to get renters? Anyone work with any builders in Chicago?

THANK YOU ALL FOR ALL THE SUPPORT, I REALLY NEED IT. I WOULDN'T HAVE EVER CAME THIS FAR WITHOUT YOU GUYS.

Please download this agreement and let me know if I can use this agreement to send to the owner so that I can get renters for his place. I thank you all so much, Im just not sure if I can use this agreement, other people recommended it.

Please download the agreement and let me know If I can use it, please respond soon: http://www.angelfire.com/me5/iffizworld/righttomarketagreement.pdf

Dean has a lease option/purchase agreement you can download. You should make sure it's within your state's laws as well, each state varies. Good luck and God bless!