OfflineI have recently gotten my RE Broker's license here in Raleigh, NC. I got Dean's book and it is great. I am getting ready to rock and roll. Here is my situation- I have no credit or savings because of the economy as I was a contractor/custom home builder for years and we were hit very hard by the market collapsing. I also have a yound child at home to look after and support. My career allows me a great platform to start using Dean's techniques and although I am still reading the first of his book's I am anxious and ready to jump in with both feet using the lease option method. I have access to great properties and great deals as well as clients looking for homes. I also have the the skills and horses to do any work necessary, however I have no capital. Is it common to have a bit of fear before moving foward on the first deal? My concerns are with me signing to locking up a property then being on the hook if things don't go as planned. Again I have no funds to weather the storms which may come. Am I correct in that I would lock up the property with a lease option contract witht he seller, then sign a seperate lease option with my buyer. I would then be responsible for paying the mortgage payment for the seller on his note correct? Does it matter if they have a no assumption mortgage? It is lawful for me to take the payments from one party then pay on anothers note? This is my only hang up. I appreciate any help on the details of this type of transaction specifically the exchange of monies to pay the mortgage. I love the system however I cannot afford to jeopardize my standing with the RE commission.
Lease option questions
Posted on: Mon, 05/10/2010 - 15:28
In a lease option, you are agreeing to lease the property with an option to buy at a later date. You are not buying of making a mortgage payment. If the owner agrees to let you sub-lease, then you can sign a lease with your client and possibly get a positive cash flow over your original lease amount. If you decide to excercise your option to purchase, you would need to take out a new loan, or assign your rights to purchase to another party, for an amount greater then your agreement with the original owner.
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
when locking up your deal, you can use a "subject to" clause, which states that your agreement with the seller is "subject to" your finding a qualified resident or tenant-buyer to occupy the property. It you don't have or can not find your tenant-buyer, you don't move ahead with the deal. This can get you off the hook at the start so you can have someone in the house making the payments.CAUTION.. Never tie up your sellers property for several months and then tell them that you don't have a tenant-buyer. This would be wrong. The no assumption mortgage, I would not worry about this. It the bank is getting the morgage payment they will work with you. As for you jeopardizing your standing with the RE commission "i don't know". One way to get around this is to do a land trust naming himself as the beneficiary and you as the trustee, then the seller assign's the beneficiary interest over to you, you now control, and get all the benefits of the porperty. This is federal law. hope this helps. David c/o DB Homes LLC.