Lease Options - Landlords as motivated sellers
When you are doing lease option investing, it's important to find the right kind of motivated sellers.
Landlords can be great motivated sellers, especially if they are burned out. If the economy is slow, the might have higher vacancies than in a fast or hot market. In my experience, as a lease option investor, I have found there are two basics types of burned out landlords. The first type has watched a lot of late-night TV and decided to make millions in real estate. Unfortunately, many people buy real estate with no knowledge or experience, thinking they know it all after hearing a high-powered, adrenaline-rush sales pitch. This type of landlord will fall for the professional tenants and their stories and experience, and often end up getting burned.
The second type of landlord is more tired than burned. These landlords are retiring and ready to move on with their life. They don't need the money from the sale of a home, and in many cases they don't want to receive it yet. They usually have huge capital gains to contend with and may not want to pay those gains yet.
When I purchase a home from a landlord as a lease option, one of the benefits to him or her is that I usually completely assume the maintenance on the home, or ask them to assume only the first $500. I also take responsibility for the advertising, vacancies, showings and so on. By taking away all of the landlord responsibilities I'm easing that burden that burned them out in the first place.