Is it easy to find tenant/purhaser for your L/O deal? - Posted by Kevin

Posted by johnman on April 02, 1999 at 17:10:37:

Laure,

The ones that have been calling want to put VERY LITTLE down. Not good, so of course I politely tell them I will keep them on file and I will look for a house for them but they need to work on the down payment. Some like that others just don’t care. Oh well, you just can’t please everybody! Time to move on!!! PUT THOSE SHUTTERS UP YOUNG LADY! hoo hoooo!
see yah,

johnman

Is it easy to find tenant/purhaser for your L/O deal? - Posted by Kevin

Posted by Kevin on April 01, 1999 at 21:48:22:

Ron Legrand, in his course, saids that it is very likely that you’ll have the property rented to a buyer with good amount of down payment(I guess I should’ve said nonrefundable earnest money deposit) within a few weeks. I’m yet to do my first L/O deal, but I’m wondering if there are really a big demand for this kind of deal and a big supply of people with a sizable amount of earnest money deposit ready to do L/O deal.
I guess my fear is being stuck in a commitment to pay rent (however I might have two month to find a tenant/buyer) and not be able to find a buyer.
How really is it in real life? Do any of you have or had a hard time locating that quality tenant/buyer with enough money to put towards a house?

Thanks in advance for your sharing.

Kevin

Re: Is it easy to find tenant/purchaser for your L/O deal? - Posted by John Katitus

Posted by John Katitus on April 02, 1999 at 24:26:59:

I have done about 10 L/O’s and with one exception have found very good TB’s.

I don’t want to give you reason to worry, but the house I presently have advertised has been on the market about 6 weeks. I am confident the terms are good, and it’s a nice house in a fair neighborhood. I was sure I would find a good TB the first week. Lots of calls and interest, but nobody with cash that I would accept as a TB.

I don’t know what to attribute the lack of a buyer to, and the fact is that I never will. It’s like any time you run an ad. One day you will get one call and the next day you’ll get eight. You never know why. On my other L/O’s, some have gone quickly and some have taken as much as two months.

I believe that there is a market and I think my personal experiences attest to that. I would not suggest, however, that you put yourself in a position that you will only be able to afford one house payment, either your own or the one you are trying to L/O. Neither would LeGrand or anybody at this site (I hope). Before you get in the deal, either have access to the funds to make the payment or set up the deal so that you are not personally responsible for the payments until you find the TB.

L/O’s are a great way to handle property for the reasons you have heard. I hope you find a TB immediately. But be prepared for the possibility that you might not.

Re: Is it easy to find tenant/purhaser for your L/O deal? - Posted by Jim IL

Posted by Jim IL on April 01, 1999 at 22:38:40:

Kevin,
We have been doing exclusively “flip” deals, and are running a permanent ad to attract sellers.
We get many calls daily, and most are people looking to “buy” or “rent to own”.
The ad only says, “We buy houses, Cash, 555-5555”.
Most calls say, "well, IF you buy homes, you MUST have some for sale right?"
I then stumble an answer of , not right now, but we will have some available soon. Let me just get your info and I’ll contact you soon to let you know what we have.
Legrand was right, by ignoring other aspects of REI, we are losing a lot of $$$.
We will now find homes to L/O or “seller finance”, I assure you that.
I just finished Ron Legrands L/O module, and am buying a new ad tommorrow to attract those.
(more of them anyway).
So, I know it will be easy.
I already have a list of 15-20 people with CASH to put down, and thier basic buying criteria. Which is simple, they want a “nice home” where they do not need to get a bank morgtage.
Good luck to you,
Jim IL

Definitely! - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on April 01, 1999 at 22:08:50:

Kevin,

I have yet to complete my first L/O deal, but I suspect that Ron LeGrand is correct. I have a newspaper ad running directed toward “sellers”. The calls from potential tenant/buyers outnumbers the calls from sellers by 15 to 1.

When I finally wrap up a deal with a seller, I have a list of potential tenant/buyers who want me to contact them. Of course, I’ll do some additional newspaper advertising as well to bring in even more folks.

When you hold an “open house” for the prospective tenant/buyers, find a mortgage broker who is willing to accompany you. I have one who will prequalify my prospects while they are in the house. With the myriad of financing options available today, my broker feels confident that we might even be able to close a sale with one of those tenant/buyers. Hence, I get out immediately. Based on my market, I tend to think he’s right. Bring on the tenant/buyers!

Now, where are those darn motivated sellers? :wink:

I hope this helps.

Bill K. (AZ)

Re: Is it easy to find tenant/purchaser for your L/O deal? - Posted by Kevin

Posted by Kevin on April 02, 1999 at 24:50:02:

Thanks for this great post.
Do you have any good approach to the sellers so you would not be personally responsible for the payment until you find TB? What could be a good way to convince them to do a deal like that?

Re: Is it easy to find tenant/purchaser for your L/O deal? - Posted by johnman

Posted by johnman on April 02, 1999 at 24:32:14:

John,

You are absolutely right. I have my first L/O and the first week I ran my ad I had tons of phone calls but none I would consider as a good TB. Fortunately I do have the funds to hold on to this prop for a while. So, I’m in no rush. I will find a good TB! Nice post!

Johnman

Re: Is it easy to find tenant/purchaser for your L/O deal? - Posted by Laure

Posted by Laure on April 02, 1999 at 05:01:07:

I have found that it depends on how much option money you are asking for. If you only want 3,000, there are tons of people who can afford that, especially now with tax refunds out there floating in their pockets. I have gotten 3000 down several times and quick as heck. Usually a week or two. Last one for 5,000 just dropped in my lap as they had my name from previous house I sold. Newest house, I have raised the price on, last deals all went in the mid 50’s and this one is high 60’s. I have only had a sign on the road for a week and have not shown it, but it will go as soon as it is totally complete. I still have some shutters to get up, bushes put in and trim to hang.

Laure :slight_smile: