All Forum Posts by: Alexander Ryan-Bailey

Why can't your LO's supply the DP money? If all you need is $30k, I would think you could get that doing no more than 10 Sandwich LO, which should take no more than 6-8 months to get.

Not enough info to really answer your main questions. Percentages tell me nothing since they are all relative to the actual dollars moving through the deals.

I could put that $30k down today, but I'd prefer private money vs my own funds.

If you're getting your 30 back almost immediately, which you would be doing SLO, why would you rather pay for it using a loan (someone else's money).

Your cash is there to "use" (this is using), and your profit is made to "send".

Could you explain on how I could get the $30 back right away? Would love to do that! Right now I get $5k to $10k up front. Then $20k-$40k on the backend after a few years.

As soon as you put a tenant buyer in, which should be almost as fast as you take over the property, you should get all the money back you put in plus profits because you should be renting it for more than you are paying rent, and the Option Consideration should be higher than what you are paying. There isn't anything else that should come out of your pocket, so if you put $30k into SLO's, you should be getting it all back and more once the unit is filled. If you don't, you're doing something wrong.

I respect your opinion. But I'm not doing anything wrong. There are multiple ways to do deals. I keep my buyers down payments to be 3-5%. I also charge by tenant buyers market rent or a tad bit more. We may be in totally different markets, so as I respect your suggestion it doesn't work for my business which is why I'm looking for private money to try something different. Thanks though!

It isn't a matter of you doing anything right or wrong. I'm just confused as to what it is you're doing.

Got it! I do lease options. Get a property under contract at a discount, we agree to lease for a few years then purchase. My tenant buyer pays a higher rent which gives me cashflow, and also pays my a down payment + higher purchase price.

After listening to Joe McCalls most recent podcast about private lending on Lease Options, I decided to give it a go.

Seller wants $150,000 / Property is worth $210,000 --> I find say $30,000 for a down payment via private money to purchase this outright.

Loan is now $120,000. Mortgage of $800 + 10% interest to lender is $1050 or so.

I find a tenant buyer to pay me $10,000 down pmt / $1250 mo. / with a purchase price of $210,000 after 3-5 years.

Tenant buys at $210,000 - $110,000 left on loan = $100,000 check my way.

Of course $30,000 goes back paying off my lender. On top of that I'd give them another $20,000 for simply partnering with me.

Hope that helps.

What down payment? There's no DP in a SLO...just Option Consideration, which is 100% of the cost of the Option.

Why are you putting up any DP money?...and financing the property at all? This it totally unnecessary...and a waste of your funds. Even if using DP's were part of this, why in the world would your buyer be putting up $20k less than you would be putting up? They should be putting up more than you.

There are only 2 sets of three contracts in a SLO. One set is between the current owner/landlord and the REI (you), and the other is between the REI (you) and the tenant/buyer. In both cases, each part is its own contract, and there should be NO MENTION of the other contracts in each contract. The three contracts are:

1 - The Lease Agreement = Gives control of the use of the property
2 - The Option Consideration = Buys the Option Contract. This is NOT a DP. This is just the cost to buy the Option Contract.
3 - The Option Contract = Gives the exclusive right to buy the property over a specific period of time.

If the term in the Option Agreement runs out, and the Option is not exercised, the Agreement is null and void.

The 4th Contract should only come into play if the Option Contract is exercised...and that's a typical Purchase agreement.

The REI makes their money on the spreads between the similar contracts, and at no time should the REI ever be spending more money than the OC and the first month's rent...and both of those costs should be recovered from the end tenant/buyer almost as fast as the REI spends it. My record is 3 hours.

The REI should never be closing on the property. If they do, this isn't a SLO anymore...it's just a typical buy/flip.

I was simply asking about Private Money. I'm going to keep going the route that Joe McCall is teaching me, along with the investors specializing in lease options or down payment arbitrage. Again, thank you for all of that input.

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We get down payments on all of our lease options... SLO... Thats money in our pocket! Just following the Joe McCall way, maybe the most popular lease option coaches out there. I believe you're over thinking it. Appreciate the above info though.

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lol