1. Selling Your Properties Via the Rent to Own
Technique.
Introduction
What is the Rent to Own or Lease Option Technique?
The Rent to Own technique and the Lease Option technique are one in the
same. There is absolutely no difference in the two
except the name. When using this technique you are
simply leasing your property to an interested party and
giving them the option to purchase the property from
you sometime during the lease period.
We call this interested party a tenant/buyer because
they are a tenant today and hopefully a buyer down the road. Don't confuse
option with obligation. When using this technique your tenant/buyer has no
obligation to buy, but they do have the option of buying if they so desire.
In most cases you will use this exit strategy as a way of creating a premium
priced sale in the very near future where it was not possible otherwise.
The reason selling the property through conventional methods was probably
not an option to you, or at least not an option at a premium price is because
the types of properties that work best for this type of technique are
properties located in areas that are predominantly tenant occupied.
When selling properties at premium prices the conventional way you will
want to stay in areas that are predominantly owner occupied therefore
greatly reducing your buying areas.
When you have the Rent to Own technique as part of your real estate
arsenal you now have the ability to buy in tenant occupied areas and still
realize the same profits you would in owner occupied areas. Having this
broad of a market to buy in greatly increases your chances of buying at
greatly reduced prices on a more consistent basis.
Zack Wiest
PaDEals.com
717-901-7763 Ext. 300

2. Who is Your Target Market When Using This Strategy?
Your target market when selling properties
on a rent to own agreement are hard
working, honest people who for one reason
or another have credit issues that are
preventing them from obtaining a mortgage
to buy a house the conventional way.
Due to their credit issues they are willing to
pay a premium to you in order to at least
have a fighting chance of realizing their
dream of homeownership. Another reason they are willing to pay a premium
is the condition of the homes you will be offering on these creative terms.
In most cases you will be offering creative terms [rent to own] on newly
renovated homes. When screening a prospective tenant/buyer for one of
your properties you want to look for the following criteria:
Steady Employment - They will need a steady job that pays a decent salary
in order to eventually qualify for a mortgage to buy your property. Their
debt to income ratio should not exceed 50%.
Active Checking Account - The best way to collect monthly payments from
your tenant/buyer is by check. Collecting rents by check allows you to create
a paper trail of on time rental payments which may come in handy when it
comes time to get a mortgage for them. Having 24 months of on time rent
payments, verified with cancelled checks goes a long way with a lender and
may be the sole reason your tenant/buyer is approved.
Cash Reserves - You want to make sure they have enough money to satisfy
your non refundable option deposit requirements plus any rent or pro rated
rent that will be due at the time of move in.
Respectable credit, not flawless but respectable - All prospective
tenant/buyers will have credit issues. It is your job to find the ones that
Zack Wiest
PaDEals.com
717-901-7763 Ext. 300

3. have a chance of eventually cleaning their credit up and obtaining a
mortgage to buy your house.
We suggest you not consider anyone who owes more than $7,500 in
collections. Also we do not suggest approving people who have collection
accounts with past landlords or management companies. If they didn't pay
their last landlord, what makes you any different? We also do not like to see
more than $1,500 in back child support.
Log onto PaDeals.com right now to be part of the most exciting real estate
opportunity found anywhere.
PA Deals, LLC
Zack Wiest
PaDEals.com
717-901-7763 Ext. 300