Questions from sellers about L/O... - Posted by Charity

Posted by Jacque on January 07, 2001 at 22:48:18:

Hi Ron,

I would like to receive a copy of your FAQ sheet.



Questions from sellers about L/O… - Posted by Charity

Posted by Charity on January 07, 2001 at 20:08:18:

I get this question a lot and was wondering how you guys handle it. The seller always wants to know what happens if, 6 months into the lease, the T/B leaves. Their main concern is will I continue to pay until that 12th month even if I cannot find another T/B. I always try to reassure them that finding T/B’s is normally not a problem. Do you guys guarantee payments not matter what happens? What if you hit a rough spot and cannot pay them for months on end and can’t find a T/B?

They also ask a lot about what if the T/B destroys their house. How do you reassure them on that?

They also ask why we would need additional renewals after the 12 month initial period. I explain that T/B’s may vacate for some reason (transfer, etc.) or they may need a little longer to qualify. Is that how you explain it?

Also, what sort of title check should I have done prior to signing these?


Re: Questions from sellers about L/O… - Posted by Bud Branstetter

Posted by Bud Branstetter on January 07, 2001 at 21:58:30:

One of the advantages of the PACtrust is that a separate agent holds several months payments as a contingency fund. Because of the structure they are likely to put more money up. You could do the same thing with a L/O. You then evict them with their own money and have funds to keep paying the mortgage.

Again with that contingency fund it could pay for the deductable on the insurance if more damage was done.

With nicer houses in the Pactrust format you don’t have tenants skipping or trashing houses like you would with a L/O especially on the low end.

answers-long and hopefully helpful - Posted by Ron-Va

Posted by Ron-Va on January 07, 2001 at 21:09:08:

These are pretty normal questions that you are going to hear I handle them by addressing them upfront before they even ask them in most cases. In fact I have put together a Faq Sheet that I give them when I start discussing L/Os with them which ask these questions and gives the answers before they even ask them so it really puts there mind at ease I believe.

But to answer your questions:
1.What if T/B leaves before 12 months is up? The answer is your contract is with me not the T/B I put in your home. We guarantee all payments on time and all maintenance. So you can rest at ease because you don’t have to worry about that anymore. You see Charity this is a selling point to the Landlord/Seller that we handle everything and we only put quality people in their home and we know how to find the right people to put in this home. They need to know that you will handle all payments and any problem with your T/B is your problem and not theirs.
You should not have to worry about your T/B leaving because you should screen very good in the first place but you also got a non-refundable deposit that you get to keep so even if it takes a couple of months to put someone new in you are better off than if the original T/B stayed because now you have another nonrefundable deposit in your hands so you may find yourself hoping one of them may move out :slight_smile:

So my advice is screen very good and put aside some of your Deposit you get from them for any emergencies that may happen. That way you can sleep at night with a smile on your face.

  1. What if T/B destoys my home?
    Again your contract is with me and I handle all maintenace. As Ron Legrand says in his course basically it is three words “I’ll fix it” but you do need to stress again that is why we put only very qualified people in the home so we don’t have that kind of situation.

  2. Why do we need renewals?
    Your answer was pretty much correct. I sometimes will give them some cash to extend it longer if they have money coming to them at close but most of mine do not have any coming so it is usually not an issue. In fact I tell them if they don’t have any funds coming it is good if I take 2 or 3 years to close because they can write off the property as rental income which is 1/28th the value of the property per year so it pays them to extend it anyway. But by the way I always say anything like that kinda in passing and tell them that they should check with the person that does there taxes to see if they can do that.You may ask where do you get the money to give your L/S to extend? Well from your T/B, if they want another year I get more nonrefundable deposit from them which would be more than I would give the L/S.

  3. I have a title search done just to make sure that the title is clear before we sign the contract.

Hope this wasn’t to long and it helped. If you would like I could e-mail you a copy of my Faq sheet, just let me know. I think the Faq sheets helps so much because it lets them know for one thing the concerns they have are normal and that we are prepared to handle them and are not just making up answers that sound good.

Good Luck, Ron

My Faq Sheets on L/O’s - Posted by Ron-Va

Posted by Ron-Va on January 07, 2001 at 23:25:25:

I have had several requests for my Faq Sheet and I am glad to send it out but I just rememebered where “I” came up with it. Right here!!! on the greatest little Newsgroup I have ever come across. I just went to look to see if it was still there and it is under Money Making ideas and it has been reposted or something because it is the first one listed.
I changed my a little to suit me but it is still very close to what was posted. This site is awesome, study it very well and keep pushing because of this site and some courses I took. I have done 4 very nice L/O’s in the last few months of last year with very little effort and got these 4 houses in nice areas for $0.00.
I know I know some say it can’t be done but I have never been a good listener except to people that are going or have been where I want to go.

Thanks to everyone on this site for the knowledge and the inspiration.