Joe McCall Wholesaling Lease Options
How to flip lease options and make an extra $$$ on leads you're probably throwing away right now
Who Am I? • Investing full-time since 2009 • Done 100+ deals, coached students to do 1,000's more • Do an average of 4-5 deals a month, in 3-4 different markets • Lived in Europe twice for 3 months in last 4 years • I work an average of 5 hours a week on the deal side of my business • Top 20 business podcast in iTunes “Real Estate Investing Mastery Podcast” • #1 Book in Amazon "Flipping Houses While On Vacation"
What Is A Lease Option? • The ultimate "control without ownership" • Nice house, nice area... • A Lease... • With an Option to buy the property in the future
What is "Wholesaling" Lease Options? • At first, you are the Tenant-Buyer • If the numbers don't work, and you don't want to stay in the middle... • You ASSIGN your interest to a qualified Tenant-Buyer • So instead of assigning your interest in a contract to another investor (like a regular wholesale deal), you are assigning the contracts to a Tenant-Buyer
Why "Wholesaling Lease Options"? • Some of the easiest deals to do • Lots of sellers who can't sell and even more buyers who can't buy • Low supply, high demand (80% of buyers want nice homes...) • Too much competition for regular wholesaling deals • You don't need lots of equity and motivation • You can do these deals virtually, all over the USA, from anywhere in the world
Why "Wholesaling Lease Options"? • I don't need to negotiate with sellers. Here is my offer: "What do you want for your house? Okay. I can get that for you. Take it or leave it." • Low overhead, you don't need to spend so much money on marketing • If you stay in the middle, you can get Cash Now, Cash Flow, Cash Later • You can find your own house using Lease Options
Steps
Typical Deal • Seller has a rental or FSBO on Zillow / Craigslist • Nice house, nice area, doesn't need any work • Median price range, starter homes • Seller wants to sell it, but can't • Seller doesn't want to rent it, but doesn't see another option. • They don't want to be a landlord
Typical Deal • House is worth $150,000 • Seller owes $140,000 • Rents are $1,100/mo • Seller mortgage payments $1,000/mo • Seller is current on their mortgage • Job transfer / divorce / already bought another house / etc
How Do You Make Your Profit • You add your assignment fee to the price the seller wants • The Option Consideration the Tenant-Buyer puts down is your profit • Once you assign the contract, you are not responsible for future payments • The escrow company collects the rent and pays the mortgage
Market Research • You can only sell homes people want to buy • Trulia Heat Maps • Median Price Range
Talking To Sellers • "Mr. Seller... Tell me a little bit about your home. It looks really nice." • "It looks like a beautiful home. Why haven't you sold it yet?" • Or, "Why are you renting it? Why don't you just sell it?" • "What are you going to do if you can't sell it, rent it?" • "I'm looking for an investment property that I can rent for a couple years and then buy... That wouldn't work for you, would it?"
Talking To Sellers • "What would you want to do if I told you I could rent your house, take care of all the maintenance and repairs, pay the rent on the 1st of every month, whether the house is vacant or not, then buy the house, and give you the same equity you would get if you sold thru a Realtor? You wouldn't want to do business today, would you?"
Example Deal • Trulia Heat Maps Popularity • Find house on Zillow • Spreadsheet - "How The Numbers Work" • 3 Options Offer Calculator • Send offer by email and mail • Credibility Kit • Follow up
Paperwork • Short Offer Form (one page) • My attorney handles the rest of the paperwork • New lease & option • Assignment • Escrow docs
Advertise The Property / Contract • Only two reasons why your houses do not sell: • 1) Over priced • 2) Not placed in front of the right people • If you don't find a good Tenant-Buyer in 4 weeks, something is wrong
Advertise The Property / Contract Only three things you need to do... 1. Craigslist 2. Zillow 3. Signs - yard and neighborhood
Finding Tenant-Buyers • Outsource ALL of this... • Leasing Agent to advertise the property & take calls • 3rd Party to review applications • Mortgage Broker to review Tenant-Buyer & work with them • Attorney & Escrow Company to handle all the contracts & payments
Finding Tenant-Buyers • Make sure the Tenant-Buyers can afford the home & have a good job • At least 3% to put down on the home • No prior evictions or criminal history • IMPORTANT: They have a realistic chance to get a mortgage in 6-12 months. • If not all these things, move on...
Keys To Success • Work with other wholesalers who are throwing away their leads • You have to have a Marketing Plan & Scorecard • Talk to at least 5 sellers a day • Make an offer to every seller you talk to • Answer your phone • The money is in the Database - FOLLOW UP every month • Stop doing the $5/hr activities
FREE STUFF Text “WLO” to 313131 • These Slides • Free Wholesaling Lease Options Case Study - Video and Mindmap • Multiple Options Calculator (And “How The Numbers Work”) • Letter Of Intent & Lease Options Credibility Kit • “Short Offer Form” One Page Contract • Yellow Pad Paper - Steps To Wholesaling Lease Options Deals
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