All Forum Posts by: Brandon Stewart

@wayne 

@Wayne Brooks Thanks for the reply! 

Just so I'm clear, when you say completed purchase agreement, do you mean the purchase agreement needs to be filled AND signed between me and the homeowner(before I assign)? Or do I just fill in the terms (Including sellers concessions) in the purchase agreement, attach and reference it in the option, and let the assignee and seller sign when the sales process starts? Or maybe both are wrong?

Bump

I'm going to be doing lease option assignments. I would acquire the right to lease and purchase a home, lock in a few basic terms, like the home price, rent, # of years, and then assign my interest to a 3rd party. I would give full disclosure to the seller.

A lease option has almost no value (in my opinion) without some kind of guaranteed equity given to the tenant-buyer. Normally lease options provide rent credits. However, I don't want to specify any rent credits, for reasons that are beyond the scope of this thread. However, negotiating sellers concessions up front would be a good alternative.

Here's the issue. It is my understanding that a seller concession is a part of the sales agreement. So would it be enforceable to make provisions for sellers concessions in an Option? (Pure option combined with lease to make lease option)

Perhaps putting something in the contract along the lines of: (Illustration purposes only)

- Seller shall give to purchaser a concession in the sale price of ______ for closing costs.

Then when the buyer goes to purchase the home, that concession MUST be written into the sales agreement.

That is how I think it will work...but then again, I've been wrong before. I would hate for the buyer to not be able to get what is expected.

Any help would be appreciated.

As a side note, I have tried hiring real estate attorneys in my area, but they never get back to me. I guess my money isn't good enough for them? Anyways, I have the contract to get the job done...I just need to add that one little sentence for sellers concessions.

I've heard of wholesaling lease options, but could I wholesale, or assign a regular lease without getting in trouble. If I used a broker to find a tenant, would that work. I get a few people who call me that and are interested in doing a regular lease. Not a lease option. I figure I could make some extra money if I didn't limit myself to lease options.

Thanks @Andrew Postell I learned a lot from your post. I think its better for me to leave this area of pre-screening to a professional.

I have a few people interested in a house that I am advertising Rent to Own, and i'm having a little trouble pre-qualifying them. I'm trying to get an estimate on how much of a home they can afford based on their debt and income. Is there a formula that I can use to determine this? Let's say I have someone who makes $5000/m gross. Assuming the lenders debt to income ratio requirement is 40%, we have $2000 to work with. We pull their credit and it shows they have $550 in monthly debt. So available housing costs should be $1450. How do I calculate, based on this number, how much of a home they can buy?

Also, the house that I'm advertising is available on a 2 year lease. Would you all agree that 2 years is enough time to fix most of the common credit problems? If not, how long would you say most will need?

Also, what credit situations should I avoid? One of the ladies that filled out my application admitted she had been through foreclosure. If it happened yesterday, I know that's something I can't fix. However, if it happened 5 years ago, could I move forward with her?

I'm not looking for an exact answer, but rather a rule of thumb. I just need to have an idea of what I can and cannot fix.

This is my first house by the way.

@Sierra Miller I'm not an agent, but I do wish to help agents who may have a listing that's about to expire. I need to make sure the solution I offer is better than their existing solution.

When your listing expires, is there any way for you to still make money from your listing?

Thanks for the insight guys! I ask because I see in my area many realtors listing homes they know are way overpriced. With me being new to real estate, I thought maybe there was a reason they price it so high, knowing the buyer would have to bring a huge downpayment, thus limiting their ability to sell the home. 

I have no plans to buy an overpriced home.

Let's just say the home appraises for 200k. Will they approve a loan for someone buying at 210? How about 250k if they put more money down? I know there are lot's of factors involved, and it depends on the lender. But generally speaking, how would that work if the buyer was approved for $250,000.