All Forum Posts by: Lee Smith

Brad Grayson is in Columbus IN, and he does meetups and presents nationally at different real estate investing conferences.. He's a really good guy... I don't think I can give his website on here... GRAYSON PROPerties would be what you need to look up, and maybe use those capitalized letters for a COMmercial domain name.. bahaha  I am sure I will get yanked for that.. haha

Yes it is currently rented. There's a link to the lease ledger so you can see resident has been on time or early for her rents since March.

FYI: We are also open to financing this property. 20% down, and 10% interest over 5-10 years.

I handle several lease-options each year. Key thing is to document document document... You might even write up a document to tell the buyer in layman terms everything that is in the contract and have them sign it. Just be careful and document.

It's actually two documents..

1. an option to purchase. They generally put money down for the option to purchase at a set price within a certain time frame.
   
   1. In Indiana if your option period is 36 or more months then you need to record the contract for it to be enforceable. 
   2. Option fee is non-refundable. It should state this on your contract, but make sure they initial it to make sure they understand.
2. Lease. This is a standard lease. Probably the one you have been using all along.
   1. Legally you are still responsible for all repairs to the home during this period. So if they decide they want you to make a repair, then you are ultimately responsible.

Doing a lease option can be construed by judges as a note/mortgage or land contract. Especially if you take a large down payment and/or are giving rent credits. It may not work out that way, but your worst case scenario is you may need to foreclose instead of evict.  Note: You can create documents and have the tenant buyer sign them stating they know this will be an eviction instead of foreclosure, but ultimately it depends on the judge reviewing the documents.

We sell several rent-to-own properties each year. Our current SOP is to do a 30 month lease-option to allow tenants to prove they are ready for home ownership. At the end of 30 months, if they have not been late on rent for more than 3 times, then we will switch to a note/mortgage or land contract. 

I don't know your price point, but my experiences are that 90+% of people who start a lease-option and need to refinance within 3 years don't do it. They just don't have the discipline to get their credit in line. They do usually leave just like a tenant would though. 

Lastly, qualify them like you would a tenant.. Just because they are putting more money down, doesn't mean that negates their 30k in unpaid child support, $3000+ to previous landlords, and $1000 each to 5 different mobile carriers.. hehe

Recently updated 2 bedroom 1 full bath bungalow with hardwood floors. New cherry kitchen cabinets.  We refinished hardwoods, and installed LVP(luxury vinyl plank) flooring. Repainted interior. New Roof. 

Check out the cashflow analysis... 10% cap rate!

We can manage for you if you don't already have a property manager. We are a licensed brokerage in the state of Indiana and manage 250+ properties for international and domestic investors. 

You can see pictures, videos, etc on our website. http://spousesbuyinghouses.com/property/rent-home-...

Cashflow Analysis

Lease Ledger

@Amanda Whiteley I have dealt with more than my fair share of OP stuff over the past few months.. Your best bet is going to be to have your new PM physically send someone over to put a letter in the door. If they don't or didn't respond then eviction is your next step.  They very well may show up for court and then it's up to you whether you keep them or not. 

We had 2 different units not respond, and not show up for eviction court. When we showed up with writ to forcibly evict them they provided receipts for paying rent. We just went ahead and moved them out. If they aren't responding even to the sheriff then you probably don't want them.

It's going to take some time to recover from this. Best wishes!

Star environmental in indy has remediated a couple of things for me. Just buy it and encapsulate with spray foam. 

We are using the kwikset smartkey locks. Menards had contractor packs where you could buy 2 deadbolts and 2 passage knobs for $40. But they just discontinued them.  So now we are back to single sourcing smartkey deadbolts.. SUCK!

I ran into kwikset guys at an IMN conference, and they sent me a free puck system to reset these locks.. They evidently had a bad batch come through last year and we were having about a 10% failure rate..

The key to the smartkeys is they are not very forgiving if you don't rekey the "proper" way... You put your key in, turn it quarter turn, and then push the reset, and pull your old key out.. If you go like counter clockwise or go past 3:00 you can be in for a major reset with the puck... ASK ME HOW I KNOW!!! hehe

I own a property management company, and we are adding a ton of properties each month, and I doubt I can get ahead of this with landlord locks.  

@Brian Freeman This is the first I have ever heard of this type of behavior.. Well, I did have a 5 unit building an investor of mine bought, and the city was hardcore that it needed to go back to being a 5 unit.. We did it, and they reduced all the fines if not negated them.

Just tell them you were unaware and explain the situation to them.

This is a great reason why I recommend that owners keep city notifications coming to them directly. So they know if something is going awry. I get that you are paying a PM to handle this stuff, but you need to be aware too.

@Anthony White From my experiences, most portfolio lenders want your portfolio value to be over 500k before they will discuss with you..

That's why a lot of guys will get their 10 loans(FNMA limit) and then go look for a portfolio loan to pay the 10 off.. Then start the process over again..

Most lenders have a 50k smallest loan cap. e.g.- they won't lend less than 50k. So your values need to be 65k~. If you look hard enough you will find lenders who will do 40k, and then occasionally you will find lenders who will do less.. Just going to take time to find them!

@Chris Seveney Maybe he just added the price, but it's on the top of the listing.. Basically 34k.