Why Do Use That Strategy?

Question

I am investing the time to search through the resources here for information that will assist me in discovering the answers to questions that I have at this time.

While performing my own independent research, I thought that I would reach out to fellow community members.

I am hoping to benefit from the insight of the members here and I am also looking forward to receiving any guidance that will help me in my research efforts.

I am working to put together something that will help me as I decide on the best strategy to use to acquire each property that I decide to make an offer on.  I am also working on putting together a list of the advantages of each strategy to the property owners. I want to have something that will help me as I come across various scenarios, situations and circumstances.

Would you share a particular strategy that you use, why/when you use it and the benefits that you present to the owner of the property that you are hoping to acquire?

For instance, if you use owner financing to acquire a property, please share an example of when you to choose this strategy and the advantages that you present to the property owner.

Do you have a set of questions that you use to guide you in deciding which strategy to use?

Would you please share any recommended forum posts, blog posts, articles, podcasts or other resources regarding the strategy or strategies that you share or regarding any other strategies?

As I mentioned, I am researching these topic on my own as well. Would you share any search terms that you recommend that I use?

I appreciate your valuable input.

Thanks in advance for your kind assistance.

Brian Gibbons · Answer

ugly houses CD areas--> wholesaling flipping ; see flipping book on BP from @J Scott

Pretty houses AB areas no equity --> sub2, lease options, wrap purchase

Pretty houses free and clear AB areas need updating painting carpet new kitchen --> JV with seller

Multis  --> see Askbenwhy.com

Brian Gibbons · Answer

Yes and the tools are ALL LOCATION DEPENDANT.

For instance, I coach sub2, wraps and lease options and

NC has screwy laws w LOs and Lease Purchase.  See

Can a real estate broker create a lease-purchase or lease-option agreement?

Release Date: 6/23/2015

QUESTION: An agent in the office I manage has a  listing with a seller who has been approached by a buyer who wants the  seller to enter into an agreement where the buyer would lease the  property and then buy it at the end of the lease.  I told him it was my  understanding that the parties should go to a lawyer to have something  like that drawn up.  But my agent pointed out that it’s okay for him to  complete a standard rental contract form and it’s okay for him to  complete a standard Offer to Purchase form, so why can’t he create a  lease-purchase agreement using those two forms?  I didn’t have a good  answer for him.  What do you say?

ANSWER: Real estate agents should never attempt to  use NC REALTORS® forms to create a lease-purchase or lease-option  agreement.  Such activity would constitute the unauthorized practice of  law (“UPL”) and would subject the agent to discipline by the North  Carolina Real Estate Commission. UPL is also a crime and any person who  claims to be damaged by UPL is entitled to maintain a private cause of  action to recover damages and reasonable attorneys' fees.

Boone real property lawyer John Turner wrote an article on the  subject of brokering lease-purchase and lease-option transactions that  appeared in the July 2013 issue of NC REALTORS®’s Insight magazine. In  his article, John states that the “creation of proper lease-purchase or  lease-option agreements should be left solely to the drafting expertise  of competent counsel.”  You may access the article by clicking here.

In addition, a Real Estate Commission Q&A on Offer and Acceptance  addresses this subject. On the last page of the Q&A under the  heading of “Lease with Option,” the Commission advises the general  public that there are no standard forms available for the purpose of  coupling a lease with an option to purchase. The Commission then writes:  “Attempting to modify other standard forms for such use may result in a  muddled or even unenforceable contract, and constitutes the  unauthorized practice of law when performed by real estate brokers.  Since these transactions may be riskier than a conventional purchase,  you should consult your attorney before entering such agreements.”  You  may access the Q&A by clicking here.

Finally, there are numerous instances reported in the Commission’s  Real Estate Bulletin where real estate agents have been disciplined for  drafting lease-option contracts or attempting to combine a lease with a  purchase contract. Simply stated, agents in North Carolina should not  engage in that conduct.

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Texas is not a great state for "executory contracts"  such as lease options and contracts for deed; also not a great state for sandwich lease options as the investor does not have "fee simple Title"

See

http://www.lonestarlandlaw.com/Executory.html

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Wholesaling in Florida is tricky, 3rd degree felony in some cases

See

https://www.biggerpockets.com/forums/51/topics/655...

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California is cracking down on "activities that require a license"

http://www.dre.ca.gov/files/pdf/Within_this_State_...

http://www.dre.ca.gov/files/pdf/refbook/ref01.pdf

Zane McLaughlin · Answer

The strategy that you use will be based on the situation that best suites the situation. Knowing each strategy will be crucial in knowing which one will work for the situation that you are in. For instance, if you have a seller that comes to you and is "open to creative financing," it is your job to gather as many details as possible. Now lets say that seller out right owns the house, lives out of state, and is looking to "make the place an investment." This deal is leaning a lot more towards a "seller financing" deal, since you can negotiate a purchase price and interest rate. Now lets say that the owner is behind on payments, and the house needs some fixing up and they. "Just want this head ache to go away." This kind of deal may lean more towards a subject to deal since there is going to need to be some working with the bank to get them caught back up so that the house doesn't go to foreclosure. These deals have a lot riding on them and to make this good for you, there has to be a large amount of control over the property. Now lets say that the owner has a house with a mortgae but is not behind, but wants to sell, but cant afford a realtor. This kind of deal may be good for a "sandwich-lease-option". You can close this deal by offering a different solution of selling their house.

Take time and listen to your client, and think about the best solution that not only helps you, but also them as well.

Why Do Use That Strategy?

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