Well, as we have discussed in previous newsletters first you have to set up goals for yourself, both long term and short term. Don’t forget these goals define how your business is run. They will determine what you do on a daily, weekly and monthly basis. The best way to do this is to picture yourself a year down the road. Close your eyes and get a mental picture of where you want to be, what you want to have, how you want to look, then open your eyes and write all that down on paper or speak into a voice recorder.

First determine how much time you will have to work on your business. If you are starting part time or spare time and think you might have 5-7 hours per week, in reality you probably will have 2.5 to 3.5 hours per week. Whenever we ask a partnering student how much time they have I always cut the time they give me in half. Why? Well because things come up, such as children, obligations, illnesses, their other job, etc. So rather than kid yourself and set yourself up for failure before you even start, be realistic with the amount of time you will have.

Once you have determined how much time you have, make up a 12 month plan. For example if you only have 3 hours per week to work, that means in a 4 week month you have 12 hours. So realistically, the first month is going to be getting yourself set up. Getting your identity package done, your template letters done, your database set, your telephone script done, your research (networking, FSBO sites). You want to start collecting newspapers (remember 5 weeks and older). Your second month would be going through the newspapers, and going on line to those FSBO sites and collecting numbers. During the end of the second month (6 weeks after you have started) you should be able to start calling on property. Depending on the hours you are doing your calls will determine how many people you get to speak with as opposed to leaving a message for them. Months three and four you will continue your calls, set up a networking schedule and do deals with one particular strategy. After you feel comfortable with that strategy you can move on to the next one during months five and six. Months seven and eight should have you starting the next strategy, and the same goes for the remaining months (nine, ten, eleven and twelve). During months eleven and twelve you should do some evaluating of your goals for the year, and start thinking of where you want to go in year two. Be sure to write articles up for each deal and make note of things you did wrong (yes, you will make mistakes) and how you fixed them for subsequent deals.

Once you have your monthly plan set up, break that down in weekly goals, and then set up your daily goals to meet your weekly goals. If you don’t meet some goals, don’t beat yourself up. Look at the reasons why you didn’t meet your goals for that particular day, week or month. Did other things get in the way (family, work, health issues) or did you just slack off. Sometimes you need to take a breather and come back with some fresh energy. So if you need a break once in a while take one.

However, you need to realize if you want to succeed you need to make a commitment to implementing the plan you set up. If this means missing some television shows, shopping spree, visiting with friends or some sleep; then that is what you have to do.

So start implementing the plan today!

Copyright DeFiore Enterprises 2003

Let’s review one of the common misconceptions that is thrown around by folks touting the wonders of selling properties on a lease option:

You won’t have any repairs or maintenance.

True, you can certainly have your documents state that the tenant/buyer (TBer) is responsible for repairs. In fact, I’ve seen numerous variations of this ranging from the TBer is responsible for all repairs to only those repairs falling within a certain price range. Some investors ask the seller to be responsible for repairs up to a certain amount and ask the TBer to be responsible for those over that amount. Insurance will theoretically cover major damages so that’s not an issue. And I know from several experiences that insurance will and does cover many repair expenses less than $10,000. So far, knock on wood, I haven’t had to test going above that amount.

So, what happens when your TBer moves in, sends you back your move-in condition form and two days later the A/C, heater, or whatever goes out? You’re either ponying up some money or you have one upset TBer. Yes, I know it’s wise to have them sign off on an inspection or an inspection waiver prior to move in, and if you’re not doing that, I recommend it. However, do you think that’s going to matter if the TBer just gave you the majority of their life savings and they’re looking at a large repair bill?

Yes, you can use some of their funds to purchase a home warranty and I also frequently do that. If the expense happens to be one that is actually covered under the policy on such a short time frame and not classified as a pre-existing condition, then you’re fine and the TBer can just pay the deductible. Wait a minute, didn’t you shell out a few hundred for the warranty? True, it came from the TBer’s funds, but that option consideration was supposed to be yours to keep, right?

Other recommendations on addressing the issue include asking the seller to be responsible for repairs for a certain time period and then passing that “guarantee” on to the TBer. Again, it may be one of those “sounds good in theory” type arguments. The few times I’ve gone that route I’ve not had to test it, but I wouldn’t be surprised if the seller is a bit upset if I had to call to ask for money after the fact. And what happens if your repair period from the seller is only 30 or 60 days and it takes you longer than that to find a decent TBer. Oops.

What I’ve found is that typicallly the TBer will agree, sometimes reluctantly, to cover half the expense. I present that solution in such a way that it does appear as if I’m breaking “company policy”, but since “I want them to be happy in their new home”, I’m willing to bend the rules some. It is definitely smart to push the TBer to get an inspection done prior to move-in as this not only comforts them, it protects you. Make sure you get a copy of it and have the TBer sign off on it. To be clear, I only make this offer for repairs that occur in the first 30 days. After that, they’re on their own or insurance will take care of it.

Let’s not forget the TBer who doesn’t call to let you know that something needs repair. You may have done such a convincing job explaining that it was their responsibility that the TBer chooses not to call. Since they don’t have the money to fix the water leak in the upstairs tub, they just let it continue. Now, we’ve got some mold issues and much more serious repair numbers. It’s critical in my opinion that the TBer call you if they have a significant repair, even if they’re able to pick up the tab. I want to know what’s going on in my properties.

So, to summarize, I think there are some important steps to take when you sell your properties on a lease option. Take what you feel is important and incorporate it into your business if you haven’t already done so.

1. Push the TBer to get an inspection done. If they don’t have the $200 or so to do this, ensure they sign off on an inspection waiver. It’s more difficult for them to come back to you demanding their option consideration and rent back due to needed repairs if they made this choice on paper and signed it.

2. Consider using part of the TBer’s funds to purchase a home warranty. Not only does it comfort their concern of potential repairs, it increases the likelihood that needed repairs will get done. It’s cheap insurance in my opinion.

3. Set up your standard operating procedure regarding repairs. Like all issues regarding properties with which you stay involved, it’s important to promote and maintain consistent, documented procedures. In other words, don’t have different repair policies for different properties or TBers. Choose the repair responsibility method or methods you think will work best and stick with them.

4. Another item not mentioned that is also company policy is that the TBer must have and maintain renter’s insurance. Policies can be purchased for very little funds and it protects their personal property. Typically, these policies will also have a liability component that provides an initial layer of protection before they get to your policy. This way, if some accident happens, like the tub leak above, that damages their property, they won’t be coming to you first for replacement.

Selling on lease options can be a profitable technique if done wisely. Just don’t go into it believing it doesn’t take any work and that the landlording headaches are completely removed. They aren’t.

Thanks for reading.

(c) Copyright 2003, All Rights Reserved.

About The Author

Tim Randle can be contacted through his web site at http://www.TexasRealEstateClub.com” target=”_new; info @ texasrealestateclub .com

Why Selling on Lease Options is Glorified Landlording

Heck, no. In fact, I don’t even use that phrasing.

After I get all my information on the house, financing, why they are selling, and what their needs are; I know whether or not the deal will work. I always send a follow-up letter, and a brochure. I follow-up a couple of days later to be sure they got the information, and mention that I could consult with them and help them move the property quickly, usually in 30 days or less.

Remember, the time factor here. You are using consulting because the numbers don’t work. The seller, however, needs to move the property within a specific time frame, so you have an additional option and a very good solution for him.

If the seller is not time motivated, you will not get a consultation immediately. Consulting might work later on, but she/he is going to want to think about it. When I cold call on these, I follow-up with a brochure, my phone call that they received the information, and that I will get back to them or they can call me if the traditional methods don’t work for them. I always say to them, I just want them to know that there are other options for them to go with.

You have to give value in your consultations. If you don’t have some kind of written material for them, which I strongly suggest, you will have to sit down with them, and do a lot of hand holding. This also limits you to only working with individuals in your immediate area, and as we mention in our manuals and e-books, consulting on the web is a dream, and can add substantially to your cash flow.

You also need to have a reasonable price structure. I know some people believe in charging a bundle for consultations (many of these individuals only work in areas e.g. CA they can get away with this; I’d like to see them try this in let’s say Indiana, Kentucky, or some areas in the South); however keeping your pricing at a affordable level gets you more business, more referrals, and ultimately more money. Pricing is going to also be very dependent on the area you are working in.

I’d rather have five consultations per week than just one, because I then have five people that can refer me to their friends and colleagues.

What we do is offer several packages to sellers. The consultation is at a basic rate with 30, 60 and 90 day follow up periods. The price is commiserate with the follow-up periods.

So try consulting, it’s another income stream for you, that is also a win-win-win situation for you, the seller and the tenant/buyer.

Copyright 2003, DeFiore Enterprises.

About The Author

Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 17 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com” how to” Home Business Solutions Digest, it’s like having your own personal coach: subscribeHBS @ homebusinesssolutions .com” target=”_new

coaches @ homebusinesssolutions .com

How Do I Bring Consulting Into My Lease Purchase Business

Homeowners can sell their homes by lease option.

What are the benefits of selling my house on a lease option?

When you lease option your house, you sell the right to purchase your home at a set price within a predetermined period of time. During that time, the purchaser of the lease option pays you a set monthly fee. They pay what amounts to their "rent" to you with the provision that they can purchase your house within a certain period of time and have part of the rent that they have paid you applied to their final purchase price.

Q What are the advantages of selling my home by lease option over listing it with a Realtor?

By selling your home in this way, you avoid realtor fees and some other closing costs. You also have a tenant who intends to purchase your property. They will take better care of the home than a renter would and may even fix it up a bit for you. You also, naturally, have your payments taken care of and keep the tax benefits of owning your home, until the final sale.

Q How long does it take before your tenant/buyer cashes me out?

A That depends on a number of different factors. Many people with less than perfect credit can rebuild their credit and receive a mortgage from a mortgage broker within 6 consecutive payments.

Q Why don’t I just sell the house myself?

If you have little or no equity in your home, it will not be considered a good investment by most buyers.

Q What if my tenant/buyer doesn’t buy the house?

A It is important to pre-screen buyers to make sure that they want to buy the house and are able to buy it at some point in the future. However, circumstances can change in someone’s life, such as an unexpected job transfer, that make it necessary to move. In situations like that, a new tenant buyer would have to be found.

About The Author

Caterina Christakos is an independent real estate investor and facilitator. For more information or help setting up your lease options and screening buyers email Caterina at CChrist896 @ aol .com.

How to Sell Your House by Lease Options

Lease Purchasing affords wonderful benefits and opportunities to sellers, buyers, investors and those who would like to operate a home-based business. Lease Purchasing allows you to control property without ownership which has benefits for all.

What Is A Lease Purchase?

A Lease Purchase is a process that combines a basic rental lease with an agreement to purchase, or with an option to purchase the property. The Buyer (or Lease-Purchaser) pays to the seller a monthly payment that usually approximates a rental amount or a typical mortgage payment on the home. A percentage of that payment is typically applied towards the purchase price. At the end of the term, the buyer has the right to purchase the property for the price and terms to which both parties have previously agreed.

Put another way, a lease purchase is essentially a rental agreement combined with a purchase contract with pre-negotiated terms. The buyer leases the property for a specific period of time and then purchases the property before the end of the lease agreement. Sales price, length of rental, rent credits, escrow instructions, etc., are all contained in the agreement.

A lease purchase is a wonderful way to control property without the headaches of banks, mortgages, taxes or immediate loan qualifying. Lease Purchasing gives you the right to buy the property, but not the obligation to buy.

Following are just some of the benefits of Lease Purchasing.

Benefits For Buyers
Low down payment.
Qualification restrictions are not as great as in conventional financing.
Past credit problems are not usually a road block.
The option consideration can be fully credited to the purchase price.
Your rent money is working for you.
Purchase price is usually locked-in ahead of time.
Gives you sufficient time to check out all the features and faults of the house.
Time to check out the neighborhood.
Puts you in legal control of a property for a specified period of time.
Time to shop for and obtain the best financing.
Major maintenance and repairs are the responsibility of the owner; you take care of nothing but minor maintenance.
Profits, in case appreciation occurs and you decide to sell in the future.

Benefits For Sellers

Usually top sales price for the property.
Better quality tenants.
Higher rent than usual for the market area.
Non-refundable option consideration.
All minor maintenance is delegated to the tenant/buyer.
Seller remains on the deed.
Seller retains the tax shelter.
No fees to pay.

Benefits For Investors

Maximum leverage.
Minimum cash outlay.
Minimum risk.
No maintenance.
Wonderful cash flow.
Excellent profit potential.

Benefits For The Business Owner

Little start-up capital needed.
Little or no credit needed.
Wonderful cash flow can be generated immediately.
Excellent and realistic first year income can be achieved.
Business can be started simply, no major equipment to buy.
Business can be operated full time, part time or in your spare time.
Best of all, the business can be operated from your own home office.

Copyright DeFiore Enterprises 2000

Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com/ for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our

A large percentage of the mail we receive are from people that complain that sellers don’t want to do a lease purchase, they just want to sell their house. Or sellers come up with too many objections. My questions to those individuals are:

1. How soon after a property is listed are you calling? If you are calling only 2-4 weeks after a house is listed, sellers are not as interested. They still believe they will sell their home.

2. Are you following up on those sellers who say they are not interested now? While right now they may not be interested in lease purchasing their home, they might be six months down the road. Remember you are not in this business for the short term, but the long term.