When I first started doing lease options it was about two years before I realized that I needed to work with Realtors because of their control over the sellers. Realtors pre-screen everything for you and in general their sellers aren’t in financial trouble. The Realtors control the relationship with the sellers and the sellers tell the Realtors everything, including personal information. That’s one of the key reasons I like to work with Realtors – they control the knowledge base about the seller.
I look for Realtors who can understand lease options and can help their sellers also understand the benefits of lease option, but this understanding can take time. My job is to assist them and help them understand when to call me. Here is how I generate leads for lease options through realtors.
1. Making cold calls to generate leads
If you look in any real estate section of any newspaper, you can find the top listing agents you need regarding potential properties. Many times the agent is unavailable, but that’s not a problem. Just leave a descriptive message about the property that interests you and let the agent know how to contact you. You might want to make yourself a short script with the highlights of the things you need to discuss so that you don’t fumble for words when on the phone. Also don’t be afraid to ask for information from the assistants. They often know as much or more about the status of the home and the seller.

2. Structuring the Deals through Realtors
Tell the agent how you found out about them – butters them up a bit – and let them know that you are willing to give a presentation. Suggest that the Realtor fax you a potential listing. If you have already developed a relationship with the Realtor, you can always “dig” a little during the phone conversation to see if they have a property that is a good candidate for a lease option that they might have overlooked.
A. Proposal – used to put together a mock-up offer to a Realtor that they can then present to the home owner or seller. It will put down the overall terms in writing without the specifics. This saves a lot of paperwork because you only fill out the other paperwork when you have an agreement on the proposal.
B. Letter to get into the brokerage office – I tell the broker what I do and don’t be anxious on the proposals – make it low pressure. When you’re first starting out, you‘ll want more deals to go through because there’s a great excitement in the newness of the game. Don’t get too wrapped up in a deal happening, because a lot of them don’t happen. I probably get about 40% of the proposals I put out- which means that 60% come up empty.

3. Unwanted Buyers
A Realtor will get a pre-approval letter from a mortgage company before they show a home to a prospective buyer. Otherwise they’d be wasting valuable time and energy with a lot of people who are looky-loos and not serious buyers. The Realtors don’t want to waste their time with those buyers, but those are the buyers I want and I need the names from the Realtors. So I send the Realtors a “Garbage letter” which basically says, “Don’t throw those names and numbers in the garbage! I can help the buyers get into a home with lease options. I offer a $1000 finders fee for every name that ends up in a deal.” This is another incentive to Realtors to work with me. I’m not out to steal their business – I’m here to help them and to offer a unique service to buyers with financial history difficulties. I want to help them move their inventory, so I am interested in the buyers they can’t help in traditional methods.

Working with Realtors is key in any lease option deal.  For more information about Generating Leads through Realtors check out my book Investing in Real Estate with Lease Options and Subject-to Deals.

Learn what a Cooperative Lease Option is and when investors should use them.

Learn what a Sandwich Lease Option is and how to make a profit from the deal.

Valentines Day is usually spent taking a romantic vacation with your significant other or spending tons of money creating the perfect day.  Like many you can end up spending hundreds of dollars for one day.  If you are like many couples currently experiencing the difficulties of the recession and trying to sell a home, you just can not afford to do both this year.  If this is your situation, I have the PERFECT solution: spend Valentines Day staging your home.  One of the great things about staging your home is that it can be done with little or no money. No matter what your budget is, even if it is zero, you can use staging techniques to increase the appeal of your home.

When it comes to selling your home you want it to really appeal to buyers in a positive way. You want buyers to love your home, to look around and go, “Ooh, look at that,” or “Wow, that’s beautiful.” Your home should have some pizzazz, some sizzle. In other words you want to trick your home out and give it some bling!

Here are my tips for home staging:

1. Get Rid of the Clutter

One of the most important things to do when it comes to making the inside of your home look desirable is to get rid of the clutter. After living in our home for a while we tend to accumulate stuff. I have heard professional home stagers recommend that the average home owner clear about 1/3 of their possessions out of the house before putting it on the market. Definitely remove any collections of dolls, spoons, Star Wars figures, or any other dust catchers.

2. Window Treatments

It’s a good idea to have window treatments on every window in the house, if they make sense. A combination of blinds with curtains is best. But here’s the catch, you also want to let lots of light into the house. So the blinds should be raised and the curtains fully open. This creates a nice framing effect on each window.

3. Lighting

In addition to letting in natural light you want to add plenty of artificial light. The trick that home stagers use is to layer the lighting. They use a blend of light from ceiling fixtures, lamps, wall lights and task lights. You want to make rooms bright, without being too bright and not have any single light source overly stand out.

4. Doorknobs, Switch Plates and Outlet Covers, Oh My!

If you are going to go to all of the trouble to make the walls and doors look great, you should finish the job by replacing all light switch plates and outlet covers with new ones. I also recommend replacing all of the doorknobs if they look at all worn, because it’s so inexpensive to do it. The reason this is a pet peeve of mine is that freshly painted walls with painted over switches and outlets looks like a cover up job to me. Replacing all of the switch plates and outlet covers in your home should cost you about $30.

5. Arranging the Furniture

If you’ve ever seen a professional home stager in action they seem to have this great ability to take the existing furnishings you have and rearrange them, sometimes into different rooms and make your home look completely different–and so much better. Because the furnishings you have and the layout of the rooms in your home will be completely different for each person there aren’t a lot of general tips I can give you for arranging your furniture. Look in home magazines. It doesn’t cost anything to go to the bookstore and look at them. They are full of photos that can give you great ideas. HGTV in particular has really come to realize that the housing market has gone soft and they have multiple shows now exclusively focusing on home staging. These stagers share tons of useful tips and tricks for making your home look great. What I don’t recommend doing is going out and buying whole new furniture sets for key rooms in your home just for staging.

There are a few commonsense tips I can offer that apply, no matter what furnishings you have and how the layout of a room is.

1. Don’t leave large dead spaces.
2. Clearing the clutter applies to too much furniture as well.
3. Don’t have everything pushed up against the walls.

6. Master Bedroom

The master bedroom is the ultimate refuge. It is the haven within the home. No matter how large or small your master bedroom is, you want it to appeal to the buyers as a place they WANT to spend their nights. If your master bedroom is cramped, it’s time to move some of the furniture out. Also, closets are a big selling point for houses. Clear out your closets out. If your master bedroom closet is jam–packed, buyers will look at it and decide there just isn’t enough room, even if your closets are huge.

7. Bathrooms

Your bathrooms should be so clean you can eat off the floor (but no need to test it this way!). There shouldn’t be any mildew, soap scum, toilet rings, body hair or anything else that makes the buyers think they are buying your dirt. Make sure the mirrors sparkle.

8. Kitchen

“Kitchens and baths sell homes.” Pretty much any real estate agent in the country will agree with this. Making your kitchen look the absolute best it can is well worth it when you are trying to sell your home. The beautiful thing about staging your kitchen is that you really don’t have to spend any money to do it.

These tips will help to save you money while trying to sell your home and allow you to still spend time with your loved one on Valentines Day. A Well-staged home that is competitively priced consistently outsells non-staged homes, even the fixer uppers. By the way don’t forget the flowers! If you would like more tips for do-it-yourself home staging techniques check out my book Rent-to-Sell by clicking HERE.

WENDY’S VALENTINES DAY SPECIAL OFFER: Purchase Rent-to-Sell before February 14, 2010 for ONLY $9.95.

Enter Coupon Code: VALENTINE to purchase Rent-to-Sell Today! Share this article and coupon code with  your friends and they will thank you later.

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When qualifying a good buyer for a lease option you are looking for someone that had a blip in their credit and now they are on their way to financial stability.  When you look at someone’s credit, see if they are on their way up or not.  You can see what they have paid recently and what is still behind.   This will show up on their credit report.   Learn to read credit reports and get set up on a system that works for you.  If you don’t know which system to use, talk to others in your real estate investors group.  They will know which companies provide which services in your area.   You can also work with a mortgage broker to run credit and do the lease option approvals.

Once you have approved a tenant for your lease option home; all you have to do is draft the paperwork and have them sign it all.  You need not give more than 12-18 months to the buyer on an option. This timeframe is most often enough for a good option tenant to get a mortgage.  If at the end of the time period they just need a few more months or they want to extend, it is your option to decide if that is what you want to do.    This is when you can also renegotiate.   Maybe the homes in that area appreciated more than you expected, then you would want to extend, but increase the purchase price somewhat.  You could also ask for another $500-3000 option fee, to extend the option.  You can also raise the rent slightly.   There are times I have given my tenants an extension for free, because of circumstances.

For more information on How to Qualify a Buyer  you can check out my book Investing in Real Estate with Lease Options and Subject-to Deals.

Screening a buyer for a lease option is extremely important and yet some of us investors still go by instinct or illegal decisions.   There are two areas to discuss on screening;

1)       Detailed Screening

2)       Fair Housing.

‘We liked them’, some investors will say to me.  There are too many really good liars in the world and those of you that feel you can ‘read’ people and relying on that are in for a rude awakening.  Many of my worst situations came from my own ignorance of believing in people.   We should all screen people as if we were blind and deaf.   We would then screen them strictly on the facts and not our opinions or prejudices.

Screen a tenant by reviewing the application in my course.  Have them fill it out.  Check it for accuracy.  Make sure they did not lie to you.   If someone lies to me, they are denied the occupancy.   Check their name – get a copy of their driver’s license.    Check their employment – I confirm the pay amount, hours they work and time on the job.   Check their banking information, you might need it later.  Also check their landlord history , the current land lord may want to get rid of them, but the previous has nothing to hide.  Call them both!   Confirm it is the real landlord by one of two ways; check it on county records, or call person and say a different amount of rent than on the application.

Fair Housing:

Fair Housing is an entire seminar in itself.  Realtors around the country have half to full day training sessions on this topic alone.   Fair housing rights when violated can cost owners hundreds of thousands of dollars.  This is not an area where you want to mess up.  The bottom line is this: select a tenant on their application alone and nothing else. There are federally protected areas and there may be some state protected categories also.  Each state has their own protected areas, so check your state for the details.  The way to be really safe is don’t judge anyone by the way they look or talk. This is why I say that we should be blind and deaf to select a tenant.  If we would just evaluate on the application process alone, then we would stay out of trouble.  Then the selection would be based truly on the facts not our gut feel or our instincts.  Besides, many times we think our ‘intuition’ is that someone is ‘good’ and they later are not so ‘good’.   Stick with the law and you will be safe.

As you can see screening a buyer for a lease option is highly important. For more information on How to Screen a Buyer and putting your standards in writing you can check out my book Investing in Real Estate with Lease Options and Subject-to Deals. Stay tuned for the next topic How to Qualify a Good Buyer.

Share with me some of your tips on How to Screen a Good Buyer in the comment section!

What can you do in today’s real estate recession?  How can you still make money as a real estate investor?  What works?

I know a lot of you are probably wondering about the answers to these questions.  The nature of real estate investing is very different than it was just a few short years ago.

If you want to find some answers and learn how to do profitable deals in this market you should check out this webinar this upcoming Tuesday night (January 19) at 8 PM EST.  I will be talking with Kris Kirschner about the current real estate market.

We’ll be looking at what techniques actually work RIGHT NOW and what you can do in this market.

There will be no sales on this webinar – it’s all about info.

This is a very special webinar and one you don’t want to miss.  Kris Kirschner is a genius in real estate who knows what is working right now in the market and how to invest even if you have no experience at all.

Space is limited for this webinar, so you’ll want to register now.  The webinar is free so if you are interested in real estate investing in today’s market you don’t want to miss this.

It’s this Tuesday, January 19 at 8 PM EST.  To register go to (click on the link)

http://www2.gotomeeting.com/register/452844410:
See you there! – Wendy

Check Here for Your Time Zone:
Tuesday, January 19, 2010
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Down markets are without question one of the best times for real estate investors. Down markets contain the best opportunities and the greatest ability to make money. Any truly successful real estate investor will tell you that they do more deals and make more money in down markets than they do in up markets.

Here is what Billionaire J. Paul Getty had to say about investing in down Market:

“If you want to make money, really big money, you do what no one else is doing. Buy when everyone else is selling and sell when everyone else is buying. This is not merely a catchy slogan. It is the very essence of successful investment.”
J. Paul Getty – Billionaire

While the opportunities are great in down markets, investors need to be aware of some of the deadly mistakes that can occur.
Here are the Top Three:

1. Not Getting Cash Flow
Cash flow is king, especially in down markets. It’s harder to get cash flow in seller’s markets, and even in some areas of the country, in a buyer’s market, because the prices are still too high for area rents. In down markets it’s very important to make sure your properties provide cash flow. You can’t count on appreciation in the short term in down markets. If a property cash flows, you can hold it forever, no matter what the market does. So, if it stays a down market for a while, you are okay because it cash flows. If the market goes back up, you can make money off appreciation too. Sell it then if you choose. The choice is yours then, because you’ve got the cash flow. CASH is KING!

2. Making Excuses
I touched on this before. If you want to succeed in real estate, you have to set aside the excuses and do it. Excuses are typically hidden in reasons why you can’t do it now. “I’m too busy.” Or the fear to take action by over analyzing every deal, “This property makes $5 less per month in cash flow than I really want.”
You’ve got to take action now. Picturing in your head all of the money you’ll make and the better life you’ll have with real estate investing is only fantasizing. If you want to make money in real estate; get started, take one step and then another. No one expects you to do it all at once or even do everything right, just get started.

3. Not Using a Proven System
There are some things in life we have to learn for ourselves. Making every mistake possible in real estate, just to learn the right way to do something is not one of those times. If you try that route, it will take you so much longer to get anywhere. You will literally be years behind, if you don’t give up entirely. A proven system is someone else’s road map that you can use to learn a real estate technique.
Proven systems give you the opportunity to skip the “getting lost” part. They move you forward at a much quicker (and safer) rate than if you tried to do it all on your own. It doesn’t matter what type of investing you want to do; short-sales, rehabs, or lease options, they will save you tens of thousands of dollars in mistakes, legal fees, etc.

In a recent post I discussed why Soft markets are GOOD rental markets to invest in. Now is the best time to buy Real Estate.
Here are the 3 best ways to Buy Real Estate in a Down Market:
#1 Lease Options
Lease options are Great for down markets. The opportunities are plentiful because there are lots of sellers out there having trouble selling their homes. This means they are looking for alternatives, and what you can offer them with a lease option is a whole lot better than just renting out their home or having to do a massive price cut.
The other great thing about lease options in down markets is that you have extremely low risk. No matter what happens in the market you’ll come out okay, because you aren’t obligated to buy. But even if the market were to go down more you can always try to renegotiate with the seller and get a better deal so you can still close. To learn more about lease option investing visit my website at http://www.wendypatton.com

#2 Wholesaling A.K.A Cooperative Lease Options
Cooperative Lease Options is a safe form of investing in down real estate markets, provided you have end buyers lined up before you close. There will be plenty of opportunities for wholesale deals, but the challenge may lie in finding your buyers.
If you are doing Cooperative Lease Options it’s a good idea to have a strong buyer list lined up. You don’t want to close on the property without an end buyer because you are in a down market. If the market continued going down you would be stuck holding the property as the value declined.
What I really like about wholesaling is that you can keep your risk level low by not having to own the property. You just flip it to your end buyer. Minimizing risk in down markets is very important. To Learn More about Cooperative Lease Options Click Here.

#3 Cash Flow Rentals
Some down markets are positively flush with great cash flow opportunities. Down markets mean that the renter pool has grown as well. If you make sure the numbers work and that the rental market is strong you can do very well with cash flowing rental properties. Passive income every month is a great way to build your wealth.
While there is some risk associated with a rental property in a down market, because you do actually own the property you can easily mitigate that risk by making sure the numbers work before you buy. If a property cash flows you can hold it forever without having to worry about what the market does. To learn about some great cash flow opportunities, the same area that I’m buying in right now, Click Here