All Forum Posts by: Bill Walston

Hi Manny - Welcome to the world of Lease Options :-)

Originally posted by Manny Cirino:

I do understand the majority of the info but a couple of questions I still is.
1.)When signing the option contract generally what is a common time frame that is put on the contract. Is it 1 year, 2 years, 10 years how long does the buyer have to exercise there option.

When I'm doing a Sandwich Lease Option I like to get a 3 year term with the seller. When I find my tenant/buyer I contract with them for a 12 - 18 month term. That gives me some "breathing room" should they decide to not exercise their option.

Originally posted by Manny Cirino:

2.)in one of those threads someone stated that most tenants never exercise there option they just rent. I thought when a tenant/buyer came in to the home you acted as the bank and they as a common buyer. Not as a tenant with the option to purchase. Is the tenant made aware they are renting for a certain period or is are the contracts just written separate to make easy eviction?(am I confusing lease option strategy w/ rent-to-own?)

Rent-to-own is just another name for Lease Option. You are not acting as a bank during the lease option period. Your tenant/buyer is first a tenant. He/She will remain a tenant until the option is exercised, at which time he/she will become a buyer. Until then there is only the right to buy.

It has not been my experience that tenant buyers do not "buy." Most of mine do, but that may be because I have them work with a mortgage broker during the option period in order to get them qualified and get their financing in place. Does that mean that every T/B exercises the option? No, but it's generally not because they cannot get financed.

Originally posted by Manny Cirino:

3.)In a lease option who is responsible for the repairs. What I am really asking is in a sandwich lease option let's I am in the middle do I get the owner to pay my tenants repairs or is it on my or the tenant buyers.

I have the tenant/buyer responsible for general repairs (stopped toilet, minor maintenance, etc.) up to determined dollar amount. The owner of the property would be responsible for amounts above that limit, as well as for any structural repairs.

Originally posted by Manny Cirino:

This is just curiosity by the way. I prefer subto resell strategy. But I like to be aware of all option when evaluating leads.

I do Sub-2s as well, but only if I own the property.

Feel free to drop me an email if you have other questions. And you can check out my blog. I have a few lease option articles there.

Hi Glenn - My first question to you is: Do these tenants have leases or are they on a month to month? If they DO have a lease you may have jumped the gun on telling any of them to vacate.

There is no standard rule to follow when taking over a property with tenants in place. Each State has its own rules about whether or not a buyer of a property can terminate a signed lease agreement between a tenant and the prior owner of record before the expiration of the lease.

In some States a lease agreement runs with the land, meaning that the new owner of record must adhere to any current lease agreement that a tenant may have. In other States there is no requirement.

You should check with a good real estate attorney about your State laws. (But you may have already done that, in which case . . Good for you!!) :-)

Originally posted by Ezra Short:

Now that I now live in Tennessee I would also like to see the law that it has been made illegel to assign a contract in Tennessee.

Hi Ezra - I'm pretty sure that Chris and I both agree that it is not illegal to assign a contract in TN - IF it is done properly - and that it is considered a gray area by the TN Real Estate Commission. You should run the way you structure your deals by a good real estate attorney to make sure you are in compliance :-)

Originally posted by Sergiu Spinu:

Hello Andrea

I'm from Europe i had there an apartment witch i sold it,and have bought here in USA my first house...

Sell the property overseas and when you transfer money from bank to bank do a few transactions with no more then 10.000$ per transaction.If you do so you do not have to fill up the tax form.If your amount will be more then 10000$ you have to show from where money came from....Thanks

Hi Sergiu - From reading this I'm thinking that you may be referring to the requirement to report the receipt of cash transactions in excess of $10K. That really doesn't apply here. What DOES apply is the fact that the US taxes its citizens on their world wide income. So it doesn't matter where you make it, or how you bring it into the US, if you're a citizen you have to report it for tax purposes. Unless, of course, you intend to commit tax fraud.

Originally posted by George P.:

Did you consider bringing the cash yourself instead of wiring through the bank?

What would that accomplish George?

Originally posted by Dave T:

When the relinquished property is not in the US and the replacement property is in the US, then the property is NOT like-kind, and therefore, does not qualify for 1031 exchange treatment

Exactly right. After the Revenue Reconciliation Act of 1989, IRC 1031 was amended such that real property located in the United States and real property located outside the United States are not like kind. [See Treas. Reg. 1.1031(h)]

Originally posted by shane peck:

Hi Bill. yes i did mean usleadslist.com.. now you mentioned USLEADS as a source for probate which is an area Im interested in as well but I thought that one literally must go to county courthouse for that info. Does USLEADS only cover certain areas in the nation??

You can do the research yourself - but usleadslist may have you covered. You can check out the website to see if they can get you the leads that you are looking for. If you can't find the info give them a call - their customer service is GREAT. I would definitely use them if probates were part of my target market. Right now I'm a big fan of absentee owners, so ListSource is doing a great job for me :-)

Originally posted by shane peck:

Im having trouble deciding between usleads.com and listsource. From my understanding usleads offer a better quality of leads but 1.45 and 500 names it certainly is expensive but worth it if it produces results. what are the pros out ther using for there list source. is anyone having success worth mentioning with usleads.com

Hi Shane! I couldn't find usleads.com. Did you mean usleadslist.com? I think your choice would depend on your target market. I hear that US Leads is top notch when it comes to getting probate leads and I've several investor friends who use them for that purpose. My market is absentee owners and so far I have found ListSource to be great for those leads. Their pricing is quite good, and they have a lower minimum names per order than some other lead sources. They are pretty good at making sure that you don't get duplicate names too, if you order from them multiple times using the same paramater. I've used them for quite a while and have been quite satisfied.

Originally posted by Peter Seely:

So a question that comes up is, since I don't have a credit card in the companies name, how do I use my personal credit card to pay bills and repairs? Would it not work if I bill my company to pay, as I would if I was an employee with an expense account?
Peter

While the ideal situation would be to have a credit card in the name of your LLC this would absolutely work. And make sure you keep the written documentation :-)

Just for fun you can check out www.rentometer.com and www.zilpy.com - just consider the source :-)

I have found both sites to be accurate for some areas - not so much for others.