All Forum Posts by: Matt Berglund

It may... but it depends how you describe it to the tenant. You may mention that you feel much more comfortable with a slightly higher rent payment, in exchange for a better sales price. Think about this - the monthly rent is what you WILL collect... but you have no guarantee that they'll purchase the home. You may also weed out those that might have trouble paying the rent... the ones that don't squabble over $100-$150 month might work out better. The amount of option consideration can play into this conversation as well. 

Shirley,

This is your home - so you can surely do a lease option. Some "random" advice...

1. Price the option to purchase at market value, yet still a "good deal" for the buyer

2. LO's typically get 15-30% higher monthly rent than standard market rent rate

3. Monthly rent credit is completely up to you - HOWEVER - to be super safe, I'd stay away from it. Rather, I'd give them an "even better deal" on the sale price. If something went to litigation, you wouldn't want to give any idea whatsoever of the tenant having any type of equitable interest in the home. If you do decide to give monthly rent credit, give them a few hundred dollars/month and cap it at 1 year max... so after 1 year, they can no longer earn credit. Also, state that if they are ever late with a rent payment, they are subject to forfeiting the rent credit. And of course - make sure your contract states that this is not equity.

4. I think it works well in multiple price ranges. 

5. Ask for the "non-refundable option consideration" (the money they give you for the exclusive option to purchase) - typically 3-5% of sales price.

6. Place the option consideration money into a safe account and leave it there if you can. If the tenant/buyer walks away and does not choose to purchase, you can freshen up the house with that money.

7. Put the effort into qualifying the tenant/buyer... use a mortgage broker, assess their ability to purhcase within 1, 2, 3 years. Also, I'd recommend 1-2 year lease, with option to renew.

NC got a bit strict with terms, etc... with SB 1015, but if this is your own personal home in which you have title, just be sure to use a good contract that follows the requirements of the law.

Does anyone have any specific advice/tips when considering the purchase/flip of a manufactured/modular home? Not a mobile home ... a manufactured home. Thanks!

Hello, and thanks for the info and the invite @Michael Jobe and @Dawn Brenengen!

I think the "100 signs to generate 1 purchase" thought is a bit lacking... It may be more effective to do 50 signs in one or two markets, every weekend for the next 6 weeks. Repeated exposure that generates familiarity with the customer as well as memory/recall is probably a better approach. 

I'm a part-time (striving to be full-time) real estate investor in the Raleigh/Triangle area with some good marketing know-how and the ability to find deals. I'm looking to expand my network, meet more partners, and go after success in REI.