No ---- L/o's.........? - Posted by Jon

Posted by Tom (MI) on September 06, 2003 at 13:00:34:

You don’t have to foreclosure under a land contract here in Michigan. It takes about the same time as an eviction.


No ---- L/o’s…? - Posted by Jon

Posted by Jon on September 05, 2003 at 16:33:15:

I live in Michigan and am just about to get started. My signs came today. Question

I’m focusing on buying homes subject to the existing mortgage and l/o on back end. I want to focus on newer homes but here they are 300k+ so i’m just going to put my advertising up everywhere and see what comes my my.

? I don’t see many l/o properties and concerned maybe thats not the way to go. Maybe sell on a CFD? I’m nervous to get a house and then struggle with the exit. Should i look toward the lower end homes or higher end? What do you think about the exit in MI? Thankyou for any response

Wouldn’t a CFD always be easier to sell since all the buyers money is going to build equity for them in the property.

Re: No ---- L/o’s…? - Posted by dianna

Posted by dianna on September 05, 2003 at 20:42:49:

L/O’s may be a good or bad thing depending on what your market is like at that price point, demographics, economy,etc. Here’s a sure fire way to find out what your market is like…

Place an ad for a “generic/virtual” house and see what your response is. Put it in the FOR RENT and FOR SALE section. Something like…"Lease TO Own - No Bank Qualifying. Nice 4 bedroom. $2000/mo 555-5555. Place it in your local Penny Saver. When you get the calls, tell them the property is no longer available but you may have more in the future. Build a buyer’s list.

The ad will tell you one thing – whether or not there is a big market at that price point, or not. It’s a cheap way to test the market. Some may not feel it’s ethical – its just marketing 101 in my opinion.

I was a little apprehensive when converting my rentals to L/O’s at first, but I’m SOLD on L/O’s now. I fill my vacancies faster than any of my straight rentals. I have a similar price point, but that’s median price in our area. So, my market is first time home buyers that don’t have great credit. It’s OVERWHELMING the response I get to my ad’s. I hold the properties personally (not subject to), but that’s somewhat irrelevant.

Just test your market. Good luck!


Good luck…

Re: No ---- L/o’s…? - Posted by Ben (OH)

Posted by Ben (OH) on September 05, 2003 at 20:36:34:

I suggest you test the marketplace with ads, dream up middle-of-the-road homes for 2-3 price points. See where you get action and start there. I wonder what other L/O-focused folks are finding, but I was cooperating with a seller who didn’t want me in the middle on an awesome 6-month old home, comped fairly at $280k, he only wanted $1500/mo and I could not move it after 6 weeks and he put it up with a realtor. I expected it to be easy and I blame myself and my lack of marketing know-how - but I did use our monopoly paper in town, faithfully, weekly, and some signs.
I expose myself here to just caution against over-optimism. I hope you succeed, but that you consider my experience. I’ve decided to move down market - my marketplace is over 1million folks in the metro area, so I can pick my spots. Certainly $280k was a very, very common price point for the new builds and nice 'burbs, but I bet that far less than 10% of the mobile/moving/buying/selling public are there. And it’s like a bell curve - a nice 3/2, older, in the burbs outside bad schools, more working class, that is bread and butter type housing and that’s my next target focus.
The other big lesson I have for you if you’re just starting to move things on L/O - expect ignorance and lots of it. You have to balance your energy expenditure between qualifying and educating, with your emphasis on the former, I’d say. They need to know enough to tell you yes or no, but you need to know if they are in the ball park or off their rocker.
For the sake of learning from my expensive education, I hope you hear my two messages!
Good luck, and Godspeed.

Re: No ---- L/o’s…? - Posted by Randy

Posted by Randy on September 05, 2003 at 16:48:21:

There are pro?s and con?s to each strategy, you don?t have to limit yourself to either one or the other. The advantage to the buyer on a CFD is yes they are building equity, the disadvantage to you the investor is because they have an equitable interest in the property if they default you have to foreclose instead of just canceling the lease and giving them 5 day?s to get out. Either one is good depending on your buyer. Why not ask them what they want. And yes lower end properties are going to be easier to fill?more buyers, but high end properties draw a better class of buyer, higher income will probably take better care of the property. The point is until you have a specific property and a specific buyer, keep your options open.