After the break at the Saturday morning Training Session at the REIC classroom, Rich Edwards continued the discussion about working with Realtors to find Lease/Option/Equity Share deals.
“OK”, Rich continued, “Let’s review what we are looking for to find a good prospective lead for a Lease/Option/Equity Share deal.”
1. We are looking for owners who have or have had their home on the market for sale. Specifically, we want owners who have very little or no real equity in their home, since at this time there are many homes on the market that fit that description. 2. Although we know how to find these prospective deals through our own research, it would be very helpful if we could have someone else bringing prospective deals to us. 3. Realtors are a group of Real Estate professionals who can be that someone we are looking for. We need to develop a relationship with one or two very active Realtors to work with. 4. Because of this Buyer’s Market we are in, Realtors also are having a tough time selling some of their listings; for the same reasons, little or no equity and many homes on the market. 5. So, if we explain our program and show the Realtor how we both can profit if we help each other try to put some deals together, we will get a Lease/Option/Equity Share deal that we wouldn’t otherwise have gotten, and the Realtor gets a sale they wouldn’t have gotten. It’s a WIN-WIN situation.“Now let’s look at a hypothetical situation. You have met a Realtor who is very active in listing Single Family homes for Sale. You have a few meetings, over lunch – you buying, for example. You explain your program. Maybe review some of the deals you have already made. You ask the Realtor if he/she has any current listings wherein the sellers have a nice home in a fairly new neighborhood with little equity in the property. Also, you ask the Realtor about reviewing expired listings to search for prospective properties.”
“The number one thing the Realtor is concerned about is how does he/she get paid. If there is no sale closing now, how is the Realtor going to get paid? The method that I have used is that I explain to the Realtor that he/she will be paid their full Commission; however, possibly not all upfront. Most likely they will be able to get around 50% of their Commission upfront and the rest at a later time; probably when the Option is exercised and the property sale closes with the Tenant/Buyer.”
“Now, some Realtors may not be willing to go along with this program; however, there are some who will. They will because unless the Lease/Option/Equity Share transaction is made, they aren’t going to get paid anything anyway.”
“Keep in mind that when it is a Buyer’s Market, as we have now, things are tough on Realtors as well as Owners/Sellers.”
“OK, so now we have a Realtor to work with. We have gone thru expired listings and have selected several homes to explore for a possible deal. After contacting some of the owners we find several who are interested in listening to what we have to offer. We find a home wherein the owners, Mr. & Mrs. Whiting, are interested in our program. The Whitings are having financial difficulties. Mr. Whiting was laid off his job several months ago. He has found a new job; however, it is in a city some seventy miles away and he is driving back & forth every day. The cost of gas plus the driving time is becoming unbearable. They want to move to the other city; however, they need to get out from under their home here. They had the home listed, but no success. They are on the verge of just walking away even though they know it will severely damage their credit and hurt their chances of buying another home.”
“The details are as follows: They paid $160,000 with $3,000 down when they bought the house three years ago. They now owe $150,852. The real value of the house in today’s market is approximately $140,000. The monthly payment is $1,270 PITI.”
“Now”, Rich continued, “I want you all to work up a plan as to how you are going to present a proposal to The Whitings to Lease/Option/Equity Share, on their home. And be sure that you include a plan to pay the Realtor his/her Commission. ”
Guess who Rich is going to call on to present his proposal first. TO BE CONTINUED -
Social poster
Downloads
- No documents for download.
Track comments via RSS 2.0 feed. Feel free to post the comment, or trackback from your web site.
Currently there are no comments related to article "Finding Deals With Realtors – Part II".