Posted by Bill Gatten on May 14, 1999 at 15:35:15:
Carolyn,
Upside down mortgages can be very lucrative, if you can get the property little or nothing out of pocket (or some out of pocket, which your tenant reimburses you in exchange for tax write and a share in other ownership benefits) and have someone else make the payments and handle all costs of upkeep.
In doing these OEC’s you just have to wait longer for your profits… excellent lay-away investments for retirement. 'Course you’re probably a young chick and figure retirement is a million years from now. Me? I think of nothing else these days (except for why mankind has never improved the taste of prune juice).
I have found that most lease options aren’t found, they’re created. In other words, you find out what a seller’s problem is and what he wants to accomplish. Sometimes a L/O is the answer, other times something else will work instead. But trying to find what sellers will let your lease their house for a period of time while you sub-lease it out is like trying to find a needle in a haystack. Instead, focus on finding motivated sellers and discovering the source of their motivation, and see if you can put something together that satifies his needs and yours. Hope this helps.
A prospecting method you may try is this. Go to, or call a major Title Insurance Co. and ask the customer service dept to prepare a list in a particular zip code of absentee owners, who reside OUT OF STATE, not just out of the area. Tell the Title rep. that you are an investor. You then send a letter to each one stating that you got their name from local tax records. Tell the owner that you know that some people are comfortable with absentee management of their property, while others find it troublesome. You further state that if they would be interested in leasing it to you, and giving you an option to buy it at a future date, you would be willing to take on the maintenance and general upkeep of the home just as if you owned it…You get the general idea. Oh yeah, don’t forget to take a dozen donuts to the Title Co. when you pick up your list. Jelly donuts grease the wheels of customer service departments. LOL
Go do it Now!
JohnK(CA)
Try calling For-Rent ads in the paper and ask if they’d be looking to sell sometime in the future. Some people rent their homes because it didn’t sell and/or they’re upside-down on their mortgage…
RE: “Try calling For-Rent ads in the paper and ask if they’d be looking to sell sometime in the future. Some people rent their homes because it didn’t sell and/or they’re upside-down on their mortgage…”
How would you be able to help someone with an upside down mortgage? Where would the profit be in that? What sort of deal would you set up to work that situation? Please explain so I can learn from your example. Thanks, Carolyn