I’ve never ran into that problem. I tell the seller that I’M the one that is responsible for their home. Their contract is with ME. If for any reason my tenant does not perform, I still guarantee their payments. If for any reason my tenant was to trash their house, I’m responsible to fix it. Basically I inform the seller that I’m entering into a legally binding contract with them that makes me responsible for their home and I’m responsible to them for their payments. If for any reason I messed up in any way, they would be able to sue me for any damages.
When you present yourself as an investor that does these type of transactions on a consistant basis and explain how your taking full responsibility for their property, they don’t seem to be to concerned about what happens if I was to screw up. If anything, they tend to be more concerned about the tenant I would be putting into their property. After insuring them that I’m the one that will be fully responsible for everything they seem to feel more at ease with that. They don’t question about what happens if I don’t perform. If the seller is motivated to get out from under the property, then they seem to be more concerned whether I’m willing to help them out of their problem rather than worring about me. But if they happened to ask such a question and I wasn’t able to satisfy them with how I presented myself, then I would offer to show them my credit report to show them that I would have a lot more at risk then to worry about trying to pocket all my tenants rent payments to me and not pay them their payment. If that wasn’t enough to satisfy them then they aren’t motivated in the least to get out from under their property. NEXT!
Posted by Russ Sims on April 30, 1999 at 21:00:51:
Let’s suppose I L/O out to an investor, who does a sandwich lease with his/her tenant/buyer. The investor defaults on the lease payment to me, but his tenant/buyer stays current. How the heck would I evict? I can’t go after the residents because they are not in default with me, or with the investor. Would I just void the lease agreement with the investor, and resign with his/her T/B?..Can’t figure this one out.I know it’s a matter of time until someone asks me…
Oh, what the heck;as long as we’re playing “what ifs”: What if the investor’s T/B defaults, and therefor the investor defaults. Now who do I evict?
First of all, you don’t l/o your property to someone else that can sandwich l/o it to a 3rd party. That’s the way YOU l/o properties fro yourself. NOT move your properties. Why would you even want to l/o to another investor that would just sandwich the deal to someone else?? That means your taking way to less money on the deal if you give another investor room to profit off your deal. Why not retail it yourself to your own tenant/buyer and get all the profit for yourself? That’s what your in this business for.
So to answer your question, DON’T DO THAT!
Your suppose to be the investor, NOT the motivated seller!
First of all, you don’t l/o your property to someone else that can sandwich l/o it to a 3rd party. That’s the way YOU l/o properties fro yourself. NOT move your properties. Why would you even want to l/o to another investor that would just sandwich the deal to someone else?? That means your taking way to less money on the deal if you give another investor room to profit off your deal. Why not retail it yourself to your own tenant/buyer and get all the profit for yourself? That’s what your in this business for.
So to answer your question, DON’T DO THAT!
Your suppose to be the investor, NOT the motivated seller!
Sorry, JohnBoy;I should have been more explicit. I’m playing devil’s advocate. I would never sell a property like that. But I know the day will come that a seller will ask me, the L/O investor, this question: “Well, Mr. Investor, what if you don’t perform as agreed. I can’t really evict you, because you won’t be living in the home. I can’t really evict your tenant, because they don’t have an agreement with me”. Can you see the source of my confusion? Sorry for the misunderstanding.
Russ
Sorry, JohnBoy;I should have been more explicit. I’m playing devil’s advocate. I would never sell a property like that. But I know the day will come that a seller will ask me, the L/O investor, this question: “Well, Mr. Investor, what if you don’t perform as agreed. I can’t really evict you, because you won’t be living in the home. I can’t really evict your tenant, because they don’t have an agreement with me”. Can you see the source of my confusion? Sorry for the misunderstanding.
Russ
I’ve never ran into that problem. I tell the seller that I’M the one that is responsible for their home. Their contract is with ME. If for any reason my tenant does not perform, I still guarantee their payments. If for any reason my tenant was to trash their house, I’m responsible to fix it. Basically I inform the seller that I’m entering into a legally binding contract with them that makes me responsible for their home and I’m responsible to them for their payments. If for any reason I messed up in any way, they would be able to sue me for any damages.
When you present yourself as an investor that does these type of transactions on a consistant basis and explain how your taking full responsibility for their property, they don’t seem to be to concerned about what happens if I was to screw up. If anything, they tend to be more concerned about the tenant I would be putting into their property. After insuring them that I’m the one that will be fully responsible for everything they seem to feel more at ease with that. They don’t question about what happens if I don’t perform. If the seller is motivated to get out from under the property, then they seem to be more concerned whether I’m willing to help them out of their problem rather than worring about me. But if they happened to ask such a question and I wasn’t able to satisfy them with how I presented myself, then I would offer to show them my credit report to show them that I would have a lot more at risk then to worry about trying to pocket all my tenants rent payments to me and not pay them their payment. If that wasn’t enough to satisfy them then they aren’t motivated in the least to get out from under their property. NEXT!