What is the FASTEST way to sell a property?
Sell on TERMS!
So I run an ad in the paper.
NO BANK QUALIFYING!!!
RENT TO OWN
NICE! 4bd/2ba House
The phone starts ringing off the hook!
I find a potential Buyer that has $5k to put down and says they can afford to pay $1700 per month. ($150k homes in the area would rent for $1200 – $1400 per month, so getting $1700 a month on a $1400 rental when offering an OPTION TO BUY, will bring a premium rent and people will gladly pay it, because no one else will even finance them because of one reason or another) I agree to give them an option to buy the home for $165k in one or two years. YOU get a premium on the sale price because you’re offering TERMS!
I collect the $5k up front as “Non-Refundable Option Consideration” and “IF” they exercise the OPTION, the $5k will be deducted from the purchase price of $165k, leaving my Tenant/Buyer with a balance owed of $160k. If they don’t exercise the option the option money paid is non-refundable and is lost by the Tenant/Buyer!
I get the $5k up front, plus first month’s rent of $1700. Since I was lucky and found this Tenant/Buyer in the first week, I get to keep 100% of the first two months rent since my payments won’t start for 60 days! So I collect $5k + $1700 first month rent up front, for a total of $6700. The following month I collect the full $1700 for rent and the 10 months after that I collect $300 per month positive cash flow. At the end of the year, IF the Tenant/Buyer exercises their option, they will pay $160k. After paying off the underlying mortgage of $145k remaining on the Seller’s mortgage, I’ll collect another $15k at closing.
So let’s see, that’s….
$5k option money up front
$1700 first months rent
$1700 second months rent
$300 x 10 months rent = $3k
$15k at closing ($160k – $145k = $15k)
That’s $26,400.00 over 12 months total PROFIT!
Now what happens if my Tenant/Buyer doesn’t exercise the option in a year???
Now I get to start all over again! I get to collect another option fee, raise the rent after a year for inflation and get a higher selling price for the option the next time around!
I just keep repeating the process over and over again until someone eventually exercises their option!
Assuming every tenant was to exercise their option in the first year…. how many deals like this would you have to do each year to make $100k???
Just FOUR deals like this one and you’re making $105,600 per year!
How many hours would that work out to be to find and structure a deal like this and get a Tenant/Buyer in the property? Not very many!
How many hours per week would you have to put into working at your job to make $105,600.00 per year???
One thing to remember is that the typical homebuyer or seller does not understand any type of creative real estate buying or selling. They typically use a realtor to buy or sell. When that realtor doesn’t sell that home or when that buyer can’t get that loan…. that’s where motivation starts to set in.
The buyer starts getting motivated to to buy. In many cases the Buyer will gladly pay any price to just get in if you can solve their problem.
The Buyers just need someone that will sell to them. They can’t get a bank loan or some just “think” they can’t get a bank loan and they only care about two things! How much down and how much per month? If they can afford the payments and have enough to put down in order to allow them an opportunity of owning a home, price doesn’t matter to them as much. They just WANT to be able to buy a home!
Your job is to become the “PROBLEM SOLVER!” Instead of thinking in terms of, I’m looking to buy properties, or I want to be an investor, or how do I buy properties with no money, or how do I get financing, etc…
Start thinking in terms of being a “problem solver”. Your job is to find SOLUTIONS to fix someone else’s problems! Your job is to sit down with these people and find out what their problem is. Once you figure out what their real problem is, you now know what they NEED! They all WANT an all cash sale. They WANT full price and WANT someone to just waltz in and buy their home the traditional way. But your job is to find out what they really NEED! Once you find out what their PROBLEM is, then you can determine what their NEED is. Once you know what they really NEED, then your job to get the deal closed is to just come up with the SOLUTION that will get them what they NEED that will SOLVE their PROBLEM!
You are not a real estate investor, you�re a PROBLEM SOLVER! You find SOLUTIONS to solve anyone’s PROBLEM! That’s how you make the deals come together!
The best way to find the Motivated Sellers is to get them to find YOU! You get them to find you by getting the word out that you buy property! Any property, any condition, any price, any time! It doesn’t matter. Just present the property to you and you will figure out a solution to solve the Seller�s problem to get them what they NEED!