All Forum Posts by: John Ching

As guru Ron LeGrand says, ask the attorney/"expert" to site actual case reference when making statements such as, "sandwich lease-options aren't legal in (name your state)"...

Quang, I feel your pain and frustration, but also your desire and sense of passion. 

That being said, I think what you are asking is not impossible, but it is going to be extremely difficult to attain given your present situation.

Think about it. Why would a parent or family member, much less an, "angel investor", loan you money to do a real estate deal??? What is your background or track record?

My advice would be to gain knowledge and educate yourself first. 

Go to your local REIA (Real Estate Invest Association) meetings or find real estate groups on sites like LinkedIn or Meetup.com. Get to know other real estate investors and see what they are doing and what they are looking for in properties and deals. Keep it simple at first and branch out as you gain more knowledge/confidence.

There has been some good advice presented here in becoming a, "bird dog" for other investors. Being a bird dog doesn't necessarily require money, but it does require knowledge. How do you know what a good deal is? What makes a property a good investment? You need to have the answers to these basic questions before you can be an effective bird dog.

BP is a good place to start your research, but so are sites like YouTube and Google. Good luck.

Lots of great advice here, but from my point of view, Anthony D sums it up best. Get educated first! 

Looks like you are putting the cart before the horse. Don't rush into things. Join your local REIA or mastermind-type business/networking group. Find other investors to brain storm and learn from.

Hi Michelle, I'm originally from So Cal now living in Springfield, MO. About 3 hours or so from St. Josephs, MO. I have a great network of people (wholesalers/investors) in the St. Jo area. If you want me to have one of them check out the home, I'd be happy to help. Just shoot me a PM and/or send a colleague request.

Steven, search out your local REIA or start your own MeetUp group for local investors. Use social media like FB, MeetUp and Craigslist to start. Get to know people and ask questions.

Lisa, 

This is after the fact, but a little research here on BP and YouTube for what makes a good wholesale deal will advance your RE Investing IQ quickly. 

Ben W suggested the classic MAO (max allowable offer) "formula" for making offers (70% x ARV - rehab = MAO) - always keep this formula in mind!. Although in Cali, I think you could stand to  go a little higher than 70%, but that's just me.

It appears you had a burst of unbridled enthusiasm as someone actually responded to your yellow letter! That's great. Even though the numbers don't work with her asking price, I say go take a look at the property and make some notes. It can't hurt to get into the game of evaluating rehab work.

Also, work on your comps for that home - This is all good practice for what is to come.

When all is said and done, make her an offer based on your numbers. The worst she can say is, "no". Like I said, it's all good practice.

Daniel, I know exactly how you feel. I've wanted to get into real estate investing since I was your age, many, many decades ago!  I admire your candor, passion and drive.

PM me and we can chat about moving your RE investing career forward.

BTW, @Coco, check with a RE attorney before you engage in a lease-option/rent-to-buy agreement for your Houston & Florida properties. Each state might have some distinct rules/regulations with regards to these types of deals. It's just a good way to CYA.

@JS, you can structure payments in whichever way suits your needs. One of the best things you can do for your tenant-buyer is help them better their credit score using credit repair.

For example, if market rent is $500/month (yes, it is still possible here in the US!) you can charge $600 to help offset the cost of a credit repair program (most run about $75-$99/month/borrower). Since most CR programs take 6-12 months, you can then stipulate that if the tenant-buyer successfully completes the program, that $100 will go towards a reduction in sales price.

Rent-to-buy and lease-option deals got a little more complicated since 2010 (Dodd-Frank), so have a RE attorney draft up your P&S Agreements. Speaking of which, choose an attorney that knows about lease-option agreements. It may vary from state-to-state, but I don't call their deposit a, "down payment". I call it what it is - a non-refundable option deposit.

Remember, most tenant-buyers are super happy that you are willing to give them a chance that others won't in buying a home.

@Jason Schimer - The terms I set are related to the buyers situation, but generally 1-2 years. You can go longer, depending on their circumstances. 

In general, you want to review with the buyers why they cannot qualify for conventional or bank lending and make sure they are on board with your plan for getting them there. It may require having part of their rent payment go towards a credit repair program.