th wendy patton - amazon s3boot...wendy patton 1 special guests and ... 34 finding and locating...

8/19/2014

1

Sandwich Lease Options & Link Options (aka Cooperative Options)

BootcampMichigan - July 11-13th 2014

Wendy Patton

1

Special Guests and Instructors

Jim Aydelotte

and

Keith & Shannon French

2

Unlocking the Secrets of . . .

Lease Options&

“Low Down” Deals

3

8/19/2014

2

AgendaSandwich Lease Options

• Overview of Lease Options

• Sandwich Lease Options

• How to Find Sellers

• How to Talk to Sellers

• Working with Realtors

• Analyzing the Deal

4

AgendaSandwich Lease Options

• Negotiating the Deal

• Liability Issues

• Handling Seller Objections/Questions

• Buying in Your IRA

• To be Licensed or Not?

• A Simple Retirement Plan

5

AgendaLink Options

• Overview of Strategy

• Example Deals

• Negotiating with Sellers and Handling Objections

• Initial Property Visit

6

8/19/2014

3

AgendaLink Options

• Marketing for Buyers

• Social Media and Internet Marketing

• Case Studies

• Taking Your Business to the Next Level

7

Goals for Bootcamp

• Expand your mind to new IDEAS

• Get Ideas to find more LEADS

• Get leads so you can do DEALS!

• Do deals so you can make MONEY!

• Do a deal within 29 days!

• Have FUN while learning and earning

8

A

L EAD ?9

8/19/2014

4

About Wendy:

• How I Got Started

• Where I am today

– Full Time Investor

• 5.5 Children

10

• 750+ deals

• 175 in 2002

• 4 published books in US

• 1 published book in the UK

11

6 Keys to Success

Part of My Library

12

8/19/2014

5

Option Agreement

Gives the Optionee (buyer) a right to exercise a privilege.

In Lease Options - The right to purchase Real Estate at some future date with defined terms.

13

Sandwich Lease Option

A contract with a seller to buy their home for a set price and set terms on a lease option. Another lease option on the same home with a tenant-buyer. You are the buyer on one and the seller on another.

14

Sandwich Lease Option

Two Contracts on the same house. You are in the middle.

You are the buyer on one and the seller on the other

Pro-Buyer & Pro-Seller Contracts!

15

8/19/2014

6

Cooperative

Cooperate:

to work or act together or jointly for a common purpose or benefit

to work or act with another or other persons willingly and agreeably

16

Cooperative/Link Options Lease Option

A contract with a seller to buy their home for a set price and terms – and an assignment of the same contract to an end tenant-buyer. You keep the Option fee from the buyer.

17

Controlwithout

Ownership!

18

8/19/2014

7

Real Estate Market

Goes Up?Goes Down?Stays the Same?

19

The Basic Parts of a Lease Option

• 3 Parts of Full L/O ContractOption AgreementRental Agreement (lease)Sales Contract

• 2 sets of Contracts for Sandwich LO

1 for buying & 1 for selling• 1 set of Contracts for Link Options LO

20

3 Important Points

• If you don’t ask the answer is:

– NO!

• KISS –

– Keep It Super Simple

• Learn to say “NEXT”

21

8/19/2014

8

Also…

Relentless Positive Action

22

Sandwich Lease Options

23

Ways to Make More $$$Sandwich Lease Options

1) Monthly Rental Amount

2) Length of Time

3) Amount of Monthly Credit

4) Price

5) Amount Upfront

6) Mortgage Buy-Down

24

8/19/2014

9

The #1 Goal is a

Seller Wins

InvestorWins

Buyer Wins

WIN WIN WIN

Otherwise…

Walk Away25

Overview of Sandwich Options

• Work well with Sellers who have Equity

– (never upside down!)

• They work well with Realtors

• Maybe…just for cash flow

26

27

8/19/2014

10

How to Find Sellers

28

Balancing Time and MoneyOnly Motivated Sellers

29

Seller’s Situations – The WHYS!

• Don’t need their cash out• No cash to get out• Main Reason = GOOD Debt relief!

2 Homes• New marriage• New Home Built• Purchased New Home• Job Transfer

30

8/19/2014

11

Seller’s Situations – The WHYS!

Other Reason = Cash FlowBurned out Landlord – 2 kindsInheritedLong time owner

Other ReasonsNot Selling in “Retail Market” Etc….

Move on with their life and get rid of the headache!!! 31

How to Find Sellers Sandwich Lease Options

• Postings ads (Craigslist) for them to call you

• Placing ads (newspaper) for them to call you

• Emailing ads out of Craigslist

• Calling ads out of Craigslist or paper

• Realtors

• Property Managers

• Direct Mail32

Finding and Locating Deals…

33

8/19/2014

12


• The KEY is to find MOTIVATED sellers.– You must find sellers who NEED to sell, not WANT to sell.

• You can NOT push a rope!

– The difference between a motivated seller and a non-motivated seller – is TIME & CIRCUMSTANCES.

– Remember – TIME and CIRCUMSTANCES changes peoples minds.

• i.e. – marriage, divorce, job change/loss, death, retirement, outgrown home, home too big, burned out landlords, bankruptcy, foreclosure coming, expired listing, etc.

– Your ability to sort these home owners out will determine your ability to get a deal quickly.

34


• So, how do I find MOTIVATED sellers?

– There are only 2 ways to find people who are interested in selling their home…

• You contact them or…

• They contact you….

– Which is better?

• Pros vs. Cons of you contacting them….

• Pros vs. Cons of them contacting you…

35


• The KEY is to find MOTIVATED sellers.

– The first basic principle is = getting the seller to contact you is the best method – WHY?

“A truly motivated seller is the key to a good deal; the moremotivated the seller, the better the deal. You will find very quickly, that you will be able to buy a lot more houses at much better prices. You will also get the terms you want when the seller contacts you first, especially in some of today’s really hot real estate markets. You’ll want to target the kind of sellers who truly need to sell as opposed to those who just want to sell.”

Kathy Kennebrook – How to Find Motivated Sellers

36

8/19/2014

13


• The KEY is to find MOTIVATED sellers.– The first basic principle is = getting the seller to

contact you is the best method – WHY?• They are typically more motivated

• They are in a situation they are trying to get out of

• They need you – you don’t need them!– Your ‘posture’ is important!

» Use ‘posture’ phrases like “If your house qualifies…, if I’m interested…”

» Be positive, upbeat, easy to understand, pleasant to talk to, good communication skills, not ‘sound afraid’, don’t be haughty, don’t beg, plead, or ask twice, or be on the defensive – YOU HAVE A SOLUTION FOR THEM!

» If you need help with this – practice – practice – practice!

37


• Getting deals by contacting sellers...

– Wendy Patton’s course...• Covers all aspects of you contacting sellers and sellers

contacting you…– i.e., Craigslist, newspapers, real-estate agents, landlords, etc.

– Start calling FSBO’s and Craigslist ads!• The #1 issue that will stop YOU from getting deals, and

getting $-PAID-$ is FEAR...

• By making calls - if you do NOT get a deal – it’s great practice!

38


• Getting Deals by Sellers contacting You...– Must have at least 3 methods of advertising to drive motivated

sellers to contact you…• Signs

• Ads

• Real Estate agents

• Direct Mail (Kathy Kennebrook is THE expert!)– Yellow Letter Campaign*

– Postcards

• Business Cards

• Website

• Radio

• Word of Mouth (this will happen after you do some deals and others find out about you)

39

8/19/2014

14


• Getting Deals by Sellers contacting You...

– Signs:

40



– The Yellow Letter Campaign

• This has revolutionized the real-estate investing world!

• What you need…– A Mailing List

– Blank Paper

– Blank Envelopes (wedding invitation size is the best)

– You or someone else to write them!

• There are companies that will do this for you

41



– The Yellow Letter Campaign example:

42

8/19/2014

15


• Getting Deals by Sellers contacting You...– The YL Campaign generates 25% return calls:– Some Angry - thinking that you’re invading their privacy.– Some Scared - wondering why you’re mailing Mom or Aunt or

Grandparents a letter wanting to buy their house;– Some Curious - wondering how we got their info– Some Hopeful - we’re going to pay them big $$$ to move

them out;– Some RE Agents – wondering why we sent a letter to their

listing;– Some from Police – who acknowledge we are doing nothing

wrong but may ask you to consider stopping because they are taking a lot of calls about our letters;

– Some are MOTIVATED – they don’t WANT to sell their home –they NEED to sell their home!

43



– The YL Campaign generates 25-30% return calls

• How the numbers shake out…

– 10% – will be ‘rubbed’ the wrong way

– 10% - will be curious

– 10% - will be suspects

• Of the 10% of suspects – expect 2-3% will be a lead…– 100 letters – will yield 2-3 leads

– 100/wk – will yield 8-10 leads/month

– 8-10 leads – will yield 1-2 deals

– At an average of $25,000/deal…

– That’s $25,000 for a $500 investment!

44

Posting Ads (Craigslist) Needed a 3 brdm home $1200 City

I am looking for a 3bdrm home for local family. They are looking for a rent to own/lease option. Are you looking to sell also? If so please email me if you have a home in this price range and area. It will not cost you anything to sell your home. Also send your phone number and any pictures you have of the home. Thanks, Wendy

45

8/19/2014

16

Advertisement For Rent / Sale Section:

Company wants 3-4 homesin this area on long term lease or

purchase. (123)456-7890

46

Advertisement For Rent / Sale Section:

Is you home not selling? We can help. We buy and lease homes. (123)456-7890

47

Placing Ads (newspaper)

• Same type but might be shorter

• Tired of Monthly Payments? We can help. Call us for a unique way to sell your home. 222-222-2222

48

8/19/2014

17

Emailing SellersCraigslist Ad - Response

Hi I saw your home on Craigslist and it sounds like what I might be looking for. I am looking to buy a home with a rent to own or lease option to buy. Are you open to selling your home? If so, please let me know and maybe your home will be perfect for me.

Also if there are more pictures or anything else you can share with me about it, that would be great. My number is xxx-xxx-xxxx.

Wendy

49

Emailing SellersCraigslist Ad - Response

Hi I saw your home on Craigslist and it sounds like what I might be looking for.

Are you trying to sell your home too? I can help. I know of a few buyers in the Metro Detroit area that want a home they can rent now and buy later. It will not cost you a dime. Please let me know if you are interested. My number is xxx-xxx-xxxx. My email is ______________

Wendy

50

Emailing SellersCraigslist Ad – Responseto Agents or Property Managers

Hi, I saw the home you have listed on Craigslist and it looks like what I might be looking for.Is the owner of this home willing to sell it also? If so can you send me more information on the home? I am looking for a home on a lease to own or rent with option to buy. Will that be a possibility for your seller? Any pictures or additional information would be great.Of course I would make sure you get your full commission if a seller were to sell their home to me. My number is xxx-xxx-xxxx. Thanks, Wendy

51

8/19/2014

18

Emailing SellersCraigslist Ad – Response

for Licensed Agents

Are you trying to sell your home too? I can help. I work with many buyers in the Metro Detroit area to find a home they can rent now and buy later. It will not cost you a dime. I get paid by the buyer. Please let me know if you are interested. My name is Wendy and I am a real estate agent with Keller Williams Realty. My number is xxx-xxx-xxxx.

Wendy

52

Direct Mail

53

Calling Sellers

• Review Script

• Live Calls - Group Session

54

8/19/2014

19

• Why?

• They CONTROL the Market!• Motivated Sellers – the 4 letter word

• How?

• Payment …

Getting Realtors on Your Team….

55

How?• Payment ….. Fee for Service Offices • Broker Letter to get in the office• Calls to Agents• Letters/Emails on Specific Properties• Open Houses • Presentation Real Estate Offices • One Day at a Time - Relationships

Getting Realtors on Your Team….

56

Criteria for Sellers in MLS

• Not a Short Sale

• Not Bank Owned - REO

• On Market over 90 days

• Median Price Point

• Vacant

57

8/19/2014

20

Calling Realtors

• Review Script

• Live Calls - Group Session

58

Review Sandwich Option Process and Checklist

(see handouts)

59

Paperwork to Use with SellersMain Paperwork

“Pro-Buyer”

• Proposal FIRST

• Sales Contract

• Option Agreement

• Rental Agreement

60

8/19/2014

21

Paperwork to Use with SellersAlso MUST have Paperwork

• Sellers Disclosure

• Lead Based Paint

61

Paperwork to Use with SellersOther Paperwork

• Memorandum of Option

• Mortgage Authority aka Bank Authorization

• Affidavit of Owner Lien Rights

62

Analyzing the DealHow the numbers work

63

8/19/2014

22

Analyzing the Deal…

• Basic Rules

– Do not work in ‘war zones’

• Lease Option nice homes, in nice areas, and understand the market you are working

– Do not force any deals!

• Must be Win-Win-Win

– Do not be emotionally tied to the deal

– Do not burn any bridges

• The seller may call you later to discuss a deal!

64


• The Fundamentals of the Deal…

– What is the ARV (After Repaired Value)?

• What are the comps?

• Does it need any repairs?

• What do they live near?

– How long has the seller lived there?

– What did they pay for the house?

– What is their asking price?

– What is their monthly PITI payment?

– Do they have any equity? How much?

65


• How Do I Get This Information?– Ask!

• But you can ask without really asking!

– Use public information*• You may be able to get answers such as:

– When the home was purchased?

– What the selling price?

– Was it listed? For how much? For how long?

The more information you have, the better chances of making a deal, and knowing how to structure it BEFORE you negotiate!

66

8/19/2014

23


• How Do I Get This Information?

– Comps:

• RE Agents

• Public Records of previously sold homes*– Recent sales in the same area, of like build!

» EASY in an UP market – more sales, more recent

» HARD in a DOWN market – not good comps

The ARV is the SINGLE MOST IMPORTANT number you can obtain to understand if you HAVE a deal and what your strategy is in negotiating a deal!

67


• The KEY Fundamentals of the Deal…

– What is the ARV?

– What do they owe?

• Or find out what they paid for it


– Are repairs needed?

– Are payments current?

68


69

8/19/2014

24


70


71


72

8/19/2014

25


73


74


75

8/19/2014

26


76


• Remember - KEYS of the Deal are…

– What is the ARV?

– What do they owe?

• Or find out what they paid for it


– Are repairs needed?

– Are payments current?

77


• Common Mistakes…– Trying to work with unmotivated sellers– Giving a seller too much down – just to get the deal– Working with low priced properties

• Work with homes that are 80% of median prices and above

– Working with houses that need too many repairs– Working with problem homes

• i.e. – too small, bad location, functionally obsolete

– Agreeing to make payments too soon– Not asking for additional benefits– Allowing seller to squeeze you out of your front end

• Just because they want something – does not mean you have to give it to them

78

8/19/2014

27


• Nothing Else Matters Until…

– The prospect passes this hurdle.

• Some will, some won’t, so what, NEXT

– It’s a numbers game…• The more people to talk to…

• The more offers you can make…

• The more deals you will have.

The more ‘NO’s’ you get – the more ‘YES's’ there are!

Are you willing to get 50 no’s for 1 yes?79


• Nothing Else Matters Until…

– The prospect passes this hurdle.

• Some will, some won’t, so what, NEXT

– You can very quickly tell the answer to…

• Will they give equity away?

• Is there enough in it for me?

• Will repairs reduce equity – and scratch the deal?

• Could this be a short sale or foreclosure?

• Are there too many liens?

Let’s look at 4 real life deals that I’ve done…80


What Do Some Deals Look Like?

• 3 Bed – 1 Bath

• 1250 SF

• ARV = $75,000

• Seller owed $78,000

• Price $79,000 - $780/mo

• $75/mo ‘Rent Credit’

• Lease $88,900 - $830/mo

• $60/mo credit to tenant

Oakwood StOwosso, MI

81

8/19/2014

28



• Profit

• $4,500 Front End

• $5,400 Back End

• $1,560 ($65/mo – 24 mo)

• Total = $11,460

Oakwood StOwosso, MI

82



• 3 Bed – 1 ½ Bath

• 1500 SF

• ARV = $74,000

• Price $67,000 - $650/mo


• Lease $82,900 - $850/mo

• $50/mo credit to tenantMackinaw StDurand, MI

83



• Profit


• $12,400 Back End

• $6,000 ($250/mo – 24 mo)

• Total = $21,900

Mackinaw StDurand, MI

84

8/19/2014

29




• 1850 SF

• ARV = $185,000

• Price $171,000* - $1,300/mo* (*Mortgage = $183,000 with $1,625/mo monthly payment)


• Lease $192,900 - $1,435/mo


M-52Perry, MI

85



• Profit


• $11,900 Back End

• $4,920 ($205/mo – 24 mo)

• Total = $26,820

M-52Perry, MI

86




• 3000 SF

• ARV = $184,000

• Seller owed $160,000

• Price $160,000 - $1,200/mo

• $2,500 Down to Seller


• Lease $189,900 - $1,500/mo


Knoll Ct.Corunna, MI

87

8/19/2014

30



• Profit

• $7,500 Front End– ($10,000-$2,500)

• $19,900 Back End

• $11,520 ($320/mo – 36 mo)

• Total = $38,920

Knoll Ct.Corunna, MI

88



• 5 Bed – 2 Bath 20 acres

• 1800 SF - 60x40 pole barn

• ARV = $230,000

• Price $80,000* cash @ close

• Mortgage = $135,000

• $1,075/mo

• $1,250 Down to Seller


• Lease $249,900 - $1,595/mo


N StateCorunna, MI

89



• Profit


• $34,900* Back End

• $20,520 ($570/mo – 36 mo)

• Total = $66,670*

• *Total amount of profit increases the

longer property is leased, as principle decreases. Currently 7 years is the term.

N StateCorunna, MI

90

8/19/2014

31

Negotiating the Deal

91

Negotiating the Deal…

• Basic Rules

– You are NOT guaranteeing the mortgage – you are only taking over the payment and maintenance!

– Most all mortgages can not assumed.

– You can’t promise cashing out, or when you will, so don’t make promises you can not keep!

– Don’t lie, stretch the truth, or exaggerate

• Your word is your worth – your worth is your word!

• It’s better to lose a deal, then your integrity or a court battle

92


• Example of a Lead…

– 4 Bed – 1 ½ bath in nice part of town

– ARV = $135,000

– Owes = $110,000

– Monthly PITI = $850

– Needs no repairs

– Wants to move ASAP

– Payments current, but may start to get behind

– They want out of mortgage, with $5,000 cash.

– Any volunteers to role play?93

8/19/2014

32


Key Questions - to work into the conversation:– Will they sell the home for what they owe?**– If I had your house appraised, what would it be worth?– What are houses like yours selling for in your neighborhood?

“If I paid you all cash, and closed whenever you wanted to, what would be the least amount that you could take for the house?”

– The BE QUIET! - until they tell you! Follow up by clinching you teeth, breathing in, and saying…

“Is that the best you can do?”

So, if I hear you right, if you don’t get $______ for the house, we do not have a deal?

If I hear you right, if I give you $______ for the house, we have a deal?

94


• What Should I Offer?– In practice – it’s much easier to make offers on nice

homes than junkers!• You usually need little to no cash

• The debt comes with the home

• It’s simply a matter of taking over the debt– Then work out how the seller gets paid for their equity – if there is

any?

– Remember!• Many times – the seller will get no $$$

– So making offers becomes very easy.

• They just WANT OUT from under the house!

95


• What Should I Offer?

– ARV = $135,000

– Owe $110,000 – PITI = $850/mo

– Wants $5,000 to get out…

– Example of Offer 1:

– $110,000

– $2,500 (from Tenant/Buyer down payment)

– $2,500 cash at closing

96

8/19/2014

33


• What if they Yes???

– Sell the home on contract:

• $144,900

• $7,500 down min (leaves you with $5,000)

• $995/mo

– Your profit?

• $5,000 Front End ($7,500 - $2,500)

• $3,480/mo ($145/mo @ 24 months)

• $24,900 Back End ($137,400 - $112,500)

• TOTAL = $33,880

97



– ARV = $135,000

– Owe $110,000 – PITI = $850/mo



– $115,000 – price on contract

– $2,500 (from Tenant/Buyer down payment)

– $0 cash at closing

98




• $144,900

• $7,500 down min

• $995/mo

– Your profit?

• $5,000 Front End ($7,500-$$2,500)

• $3,480/mo ($145/mo @ 24 months)

• $22,400 Back End ($137,400 - $115,000)

• TOTAL = $30,880

99

8/19/2014

34



– ARV = $135,000

– Owe $110,000 – PITI = $850/mo



– $120,000

– $0 (from Tenant/Buyer down payment)

– $0 cash at closing

100




• $144,900

• $7,500 down min

• $995/mo

– Your profit?


• $3,480/mo ($145/mo @ 24 months)

• $17,400 Back End ($137,400 - $120,000)

• TOTAL = $28,380

101


• Why Make Multiple Offers?

– It allows the seller to tell you what’s important to them!

• This is KEY – and allows you to zoom in on the deal quickly!

• People love different options.

– It gives the seller the ability to make the decision.

• This creates a non-confrontational sale, still give you control of the situation.

– It makes you a ‘Transaction Engineer’

102

8/19/2014

35

Liability Issues

• Who carries insurance?

103

Handling Seller Objections

104

Questions and Objections

• Buying Signal

• 4 Things on Handling

• Listen carefully

• Empathize

• Clarify

• Discuss solution or give the answer

Handling with Link Options

105

8/19/2014

36

Handling Seller Objections…

• Rule #1 – Objections are good!– This shows that the seller is thinking!

• Rule #2 – Objections give you a window into the seller’s concern’s.

– Knowing what concern’s them – gives you the ability to over come them!

• Rule #3 – Always work to overcome objections BEFORE they arise!

– In the course of your discussions, and what you can and can not do for them – be sure you anticipate their concerns, and overcome them.

106


• Remember!

– Never make promises that you can not keep, and get it in writing that you didn’t make any!

– It’s better to lose a deal than your integrity or a court battle!

– Handling objections is 75% of this business! Learn how to, and you will be successful!

“If you tell is like it is, and don’t lie to get your way, you will then be doing business only with people who wish to deal with you, and you won’t have to remember whom you lied to last” - Ron LeGrand

107


• Concern #1 – What if the tenant tears up my home?

– First - In the course of conversations with the seller, I will repeat the comment that all maintenance and repairs are my responsibility.

– Second - If the question comes up after that, I will point out that our contract says that I am responsible, and I will fix it at my expense. “Remember, Mr. and Mrs. Seller – we’re not dealing with renters – we are screening tenant/buyers who will eventually qualify for a loan, and these folks are rarely a problem, so they want to take care of the house. But if not –like I said, I’ll take care of it all per our contract. Will this work for you?”

108

8/19/2014

37


• Concern #2 – When will I get cashed out?

– In the course of my conversation with the seller, I will repeat the comment that – “On average, it will take between 18-24 months to get cashed out, but I can’t give you an exact time. I can promise you that I will make your payments, and guarantee the maintenance until I do. Will that work for you?

109


• Concern #3 – Why not just list it with a realtor?

– In the course of my conversation with the seller, I will make the comment that – “Unlike a realtor, and while you are waiting to be cashed out – remember, you are not paying me for my services, and I will be making your payments and guaranteeing the maintenance until I do. This will allow you to forget about the property, and move on with your life. No realtor in the world will do that! Will this work for you?”

– I will also weave into my conversations with the seller, that I usually have several people who would be interested in their property, and could be set up within the next 30 days, but if you go with a realtor –you will be making payments for 3-6 months or more – which comes out of your pocket.

110


• Concern #4 – But I need my money now!

– This is a common misconception by beginning investors, as they can not believe a seller will let you control their property.

• Remember – they don’t WANT to sell their house, they NEED to sell their house.

– If it comes up – remind them that if they sell through a realtor, the home will be vacant, and they will be making the payments, and they can not move on with their life until it sells, which is on average ____ days in this market.

– If the seller has a large % of equity, this question may arise, so be ready for it.

– In addition, point out that if they sell with a realtor, they will not make as much as if they sold it to you on contract, and crunch some numbers to show them.

111

8/19/2014

38


• Concern #5 – Can my attorney review the contract?

– Absolutely! No problem! If they have anything they feel needs to be changed – please have him/her let me know. If he/she says it’s good, do we then have a deal?

112


• Concern #6 – How do I know you will make my payments?– There are several ways to handle this. You can offer to pay them

directly, so they can make the payment.• This is ONLY if the seller has equity and money when it sells.

– You can offer to set up a third party escrow company to collect the payment and pay it for you.

• This service costs money – and the seller should pay it if they insist.

– You can pay the lender directly – and you’ll know right away if I’m late – as you will receive a late notice.

• If the seller has no equity, and will most likely not get cash at closing –then you should always pay the lender directly.

113


• Concern #7 – Why do you want such a long term for the lease option?– Because sometimes it takes a tenant/buyer a while to qualify

for various reasons, like raise money for a down payment, or get their credit fixed from some problem.

– Be sure to stress that you will be making the payments and taking care of the maintenance during the entire term of the contract…Your response should be a question – How long do you want me to make your payments and take care of the maintenance?

• Many times – I’ve had sellers say… “As long as possible…” Then get it for 10 years – 5 years at the very least!

114

8/19/2014

39


• Concern #8 – How do I know you will get my house sold?– Well, as you know, I want to get your house sold as quickly as I

can…and the reason why is because, I’m willing to spend my time and money giving you my best effort, because I don’t make a dime until I do. Therefore, I’m taking the risk, and since you don’t pay me – there is no way you can lose.

– If I sell – you get paid and get your cash, if I don’t, I’m out my time and costs.

• Stress to the seller that you will be making the payment – even if the tenant/buyer has to leave, and you find another tenant/buyer – you are still making the payment, and taking care of the maintenance.

115


• Remember – the key to handling seller objections – is anticipating them before they come up!

– By weaving these probable objections into your conversation with the seller, you will reduce their concerns, and make the deal much easier for them.

116


• Advantages to the Seller:– Debt Relief (#1 motivator)– No management– No repairs– Retain ownership– Retains tax benefits until sold– Gets cash at closing– Avoids problems with the mortgage company (i.e. Due on Sale

clause)– Saves their credit– Gives them positive cash flow– Allows them to make more on the property vs. selling with a

realtor (if they can wait for it).

117

8/19/2014

40


• Is this really worth my time?

– If one deal produced $3,000 from deposits, $250/moon payment spreads, and $15,000 additional cash upon sale…

• That’s $20,000/deal

• If you did 5 deals the first year – that’s $100,000 in profit for one deal every 2.5 mos.

• What if you did 1/month for 12 months?

• What if you did it for 3 years?

– QUIT MAKING EXCUSES and DO IT!118

Finding and Screening Buyers

119

Paperwork to Use with BuyersMain Paperwork

“Pro-Seller”

• Sales Contract


• Rental Agreement w/Pet Agreement

• Sellers Disclosure (copy from Seller)

• Lead Based Paint (copy from Seller)

• NO bank authorization

• NO memorandum

120

8/19/2014

41

Keeping Updated on Buyers

• Credit repair company requirement!

• Is the Tenant doing their part?

• www.LeaseOptionCreditRepair.com

• Mortgage broker following up?

121

The Closing Table

• Double Closings

• Transactional Funding

• 90 Days on Title

• New Contract with Lien

122

Sales Contract Clause• Get local legal advice

• Seller agrees to work with the buyer to make this agreement work for both parties in anyway possible – to meet lending guidelines. This includes but is not limited to: restructuring the paperwork to meet lender requirements for the buyer or whomever the buyer has sold the property to, or signing a new agreement with the buyer’s buyer for a different price and allowing the buyer to put a lien (for their profit amount) on the property to be paid at closing – so the buyer can receive their profit, if any, on this property. Any changes required to make this agreement work will not cost the seller any more money, as any expenses will be incurred by the buyer.

123

8/19/2014

42

Keeping Organized

• Folder System

• Follow up

124

Buying in your IRA

• Build for your future Tax FREE!

• Education IRAs

125

Summary

• Buy from sellers moving up in life• Sell to buyers moving up in life• Option fee to Realtors:

1%+ in buyer’s market up to 3% in strong seller’s market

• Option fee from buyers: 1-2% in buyer’s market (maybe 2-5%) 3-5% in strong seller’s market

126

8/19/2014

43

Summary Sandwich Options

• Work only with Motivated sellers

• Buy long term 3-5+ years

• Sell short term 12-24 months

• Determine your goal for profit

• Remember WIN/WIN/WIN

• Go out and work “The System!”

127

To Be Licensed

or

Not To Be Licensed?

128

To Be or Not to Be – LicensedThe Pros & Cons

ProsShows expertise in area/CredibilityCommission – Your deals and others MLS access for compsAccess to homes to viewTraining on sales and prospectingReferral FeesPresenting own offers to sellersHealth insurance at group ratesYou are one of “them”

129

8/19/2014

44

To Be or Not to Be – LicensedThe Pros & Cons

ConsMay have to pay Broker for dealsUsing state documents

Considering? Email me [email protected] to discuss if Keller Williams is right for you

130

The Ethics of it All &

Watch out For…

• Keep it good for all – win/win/win for everyone

• Do they have a realistic chance of getting a mortgage in 1-2 years?

• Would you put them in your home?

• Set them up for success

• Treat them like customers

• Full disclosure & be accessible131

We All Need…… Affordable Legal Protection

132

mailto:[email protected]

PPL/Main presentation.ppt

8/19/2014

45

Retirement Plan Overview

6 per Yr 4 per Yr 3 per Yr 2 per Yr

1 $38,400 $26,000 $19,200 $13,600

2 $77,800 $60,600 $50,600 $43,400

3 $136,200 $118,600 $80,800 $72,800

4 $143,400 $125,800 $82,800 $73,000

5 $149,800 $141,800 $85,000 $73,000

URG $500,000 $350,000 $200,000 $125,000

Properties cashing out on avg. in 24 months - in this example

at the same rate they are added

133

Retirement Plan Overview

$1

3,6

00

$1

9,2

00

$2

6,0

00

$3

8,4

00

$4

3,4

00

$5

0,6

00

$6

0,6

00 $7

7,8

00

$7

2,8

00

$8

0,8

00

$1

18

,60

0

$1

36

,20

0

$7

3,0

00

$8

2,8

00

$1

25

,80

0

$1

43

,40

0

$7

3,0

00

$8

5,0

00

$1

41

,80

0

$1

49

,80

0

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

$110,000

$120,000

$130,000

$140,000

$150,000

An

nu

al

Inco

me

1 2 3 4 5

Years

SLO - Deals/yr vs. Annual PotentialAvg. = $200/mo spread & $30,000 Equity

2 Deals/yrURG=125K3 Deals/yr URG = $200k4 Deals/yr URG = $350k6 Deals/yr URG = $500k

134

Introduction

Keith and Shannon French(One of America’s Top Power Couple RE Investing & Coaching Teams)

• Combined 20 yrs Fortune 500 experience

• Over 1,500 hrs & $150k in RE education

• Full time RE investors, speakers, coaches & entrepreneurs since 2005

• 400+ RE transactions (They’ve done it all!)(short sales, rehabs, fix & flips, buy & holds, wholesales, sandwich LOs, Sub-To’s, Link Options/Cooperative Options, private lending, land trusts, land installment contracts, etc.)

135

8/19/2014

46

Introduction

• Specialize in Link Options / Cooperative Options

• Capitalize on Multiple Streams of income within this Niche Strategy

• Operate with an EXTREMELY LOW OVERHEAD BUDGET

• Make a Very High Six-Figure Income from RE Biz

• LIFEonaires for 5 ½ years!

136

Let’s WelcomeKeith and Shannon French!

137

What We Do!

• We’ve designed our businesses around our lives, and help other people do the same

• Full time entrepreneurs since 2005

• Do Link Options transactions each month

• Titanium level Lifeonaire coaches

138

8/19/2014

47

What We Do!

• Coaches & speakers on our debt free real estate investing strategy, Link Options

• RE related internet and affiliate marketing

• Invest excess cash for passive income

• Take lots of time off

139

1.5 Days – Agenda

• Explain our Link Options strategy

• Cover the benefits of this business

• Working with and without a license

• Types of properties to look for

• Marketing for sellers & buyers

• Negotiating the deal

• Paperwork involved

• Lifeonaire

• How to start your own Link Options business

140

Why Link Options?

• Provides Quick & Consistent Cash Injections

• Involves Little to No Risk

• Needs very little money to operate

• Requires no OPM or credit

• Helps many people and is a very happy positive real estate strategy!

141

8/19/2014

48

Why Link Options?

• Needs no cash buyers or current credit qualified buyers

• Doesn’t rely on closings to get paid

• Works for Non-Distressed sellers & houses

• Can be done virtually from anywhere!

142

It’s simply linking a seller to a future buyer via a…

…Lease with an Option to Buy Contract…

…and getting paid to assign the Option!

What is a Link Option?

143

Seller Leads are Everywhere!

• It’s a strategy that will apply to 75%+ of your seller leads & the majority

of buyers

• Most, if not ALL other investors toss these seller leads into the TRASH!

144

8/19/2014

49

Terminology• We use these terms interchangeably:

– Lease Option

– Lease with an Option to Buy

– Rent-To-Own (RTO)

– Rent-To-Buy

– Rent-To-Sell

– Wholesaling Lease Options

– Cooperative Option

– Link Option

(NOT Lease Purchase which is different!)

145

Terminology

• We use these terms interchangeably:

– Option Fee, Option Consideration, Option Down Payment, (Down Payment)

– Tenant-Buyer/TB, Optionee, Tenant, Renter, (Buyer)

– Rental Agreement, Lease, Lease Agreement

– Optionor, Owner, Landlord, (Seller)

146

Evolution of Link Options

Liked Sub-To’s & Sandwich LOs, but NOT:

• Guaranteeing payments

• Being legally and monetarily vested until the TB purchases

• Dealing with market fluctuations during the lease term

147

8/19/2014

50


Enjoyed traditional wholesaling, but NOT:

• Estimating repairs

• Finding and maintaining cash buyers

• Waiting on closings

148


Combined traditional wholesaling & sandwich lease-options, but…

…eliminated the potential risks and headaches all together!

149


Rehabbing, short sales, and land-lording were just too:

– Time consuming & complicated

– Risky with unpredictable random variables

– Unpredictable with cash flow

– Much of an energy drain!!

150

8/19/2014

51

Link Options has allowed us to Build a Business around our LIFE so we can do what we want, when we want –

DEBT FREE!

151

We Only Have to Work ~ 35% of the Year!

152

Chrysalis, the Chow Chow goes everywhere with us!

153

8/19/2014

52

Moved From Baltimore, MD toSmall Town Monroe, LA!

154

General Market Comments

• Few “A” credit & income qualified buyers

• Competition on MLS, = < Max Sales price

• Buyers & Sellers are open to win-win alternatives

• Numerous sellers are tight on equity

• Many sellers can’t sell & many buyers can’t buy

155

“A” Credit or Cash Buyers

Long-Term

RentersThis is our

target buyer population!

Most Potential Buyers Fall into the Middle of a Bell Curve

156

8/19/2014

53

Marketing for Sellers

157

Keys to Effective Marketing

• Consistency!!!! – don’t give up, follow through, and keep experimenting

• Have a MIN of 3 types of marketing going at all times!

• Focus on Motivated sellers, but Non-Distressed sellers and houses

158

Whether the market is up, down, or stagnant, it doesn’t matter:

• Link Options works!

• Even in highly appreciating markets

The Link Options StrategyWorks in Any Market

159

8/19/2014

54

Typically, these things affect the seller’s net from the MLS list price:

• Conservative pricing to get offers (5-10%)• Offer is not full price (5-7% discount)• Seller concessions (3-6%)• Realtor commission (5-6%)• Repairs from home inspection (1-2%)• Closing costs split 50/50 (0.5% to 3%)Typical Net Sales Price ranges from 80%-85% of what

the seller wanted to net!!!

Typical MLS Transaction Results

160

You come in with a solution for sellers:

• Full asking price (typically 100%, or very close to what they wanted to net)

• No Direct Costs to them

• An “AS-IS” sale, and

• Are Not An Exclusive Listing!

The seller has nothing to lose by trying your service!

Seller Benefits

161

Motivated, but NOT Distressed

Doesn’t need to have tons of equity, but can’t:

– Be under water,

– Behind in payments, or

– Need cash fast

What Types of Sellers Are We Looking For?

162

8/19/2014

55

•Can be their primary OR investment property

• Doesn’t matter if it’s listed with a Realtor*

– *Must get Realtor’s cooperation and permission to market the seller’s property

What Types of Sellers Are We Looking For?

163

• Homeowner neighborhoods

– Not rent-only areas

• First time home-buyer and step up neighborhoods

– Median to a little above prices

• For MD ($125K to $350K) < sweet spot

– Low end – changes from homeowners to renters

– High end is where your market rents cap out

(all depends on your market)

What Types of Houses Are Best for a Link Option?

164

• Move-In ready homes (the nicer the better)

• 3+ BR / 1.5+ BA

• Typically, SFD are easier than Town Homes

• Vacant with Lockbox

– Occupied properties are typically cluttered and harder to coordinate showings

What Types of Houses Are Best for a Link Option?

165

8/19/2014

56

• High Rise Condos

• Less than 3 BRs

• Homes Significantly Below and Above Median for your area (MD $100K/$500K)

• Location is too Far Out

• House Needs Some Repairs

Tougher, but doable properties…

166

Top Marketing Strategies

Yellow Letter

• Do it yourself or outsource

• Our two favorite lists are

– Absentee owners

– Expired listings• MLS and/or a list broker like

www.ListSource.com

167

Yellow Letterwww.YellowLetters.com

168

http://www.listsource.com/

http://www.mailyellowletters.com/

8/19/2014

57

Yellow Letters

Lead Generation That Works!

169


CraigsList (for Rent and FSBO)

• Manually email & text yourself

• Cold call

• Hire someone to do it

• Scraper software

170

General Craigslist Search

(Baltimore) – realtor, -realtors, - apartment, -condo, etc.

171

8/19/2014

58

Email & Text to a Craigslist Posting

Hi,

Would you be interested in selling your home, advertised on Craigslist, on a lease with option to buy (rent-to-own) to one of our qualified tenant-buyers?

If so, please let me know.

Thanks, Keith410-xxx-xxxx

172


Bandit Signs & Car Marketing driving people to a squeeze page, website, or phone number

173

Roadside Signs that lead to a Squeeze Page

174

8/19/2014

59


• WordPress website that will rank in search engines

• Internet Marketing and Social Media

– Will help you rank high in Google in your local market

• Other investors’ trash leads

• Realtors & Mortgage Brokers

• Eventually, referrals will kick in BIG TIME

175

BENEFITS

• You can do as many deals as you want and fit this business around your life style

• 100% of this business can be done virtually, without ever having to see the house or meet the seller & buyer

176

BENEFITS

Today, we operate a very high six-figure income business in MARYLAND from our home in LOUISIANA...without any VAs or assistants anywhere!!!

177

8/19/2014

60

We run a full time business1200 miles away!

We live here!

Our business is here!

178

BENEFITS

You don’t have to worry about:

• Your credit • Borrowing or raising money from anyone• Guaranteeing and making payments• Property repairs or maintenance• Unexpected expenses• Property taxes & insurance• Needing a lot of money to get started

179

Link Options Help Everyone!

Sellers net 100% or close to their asking price!

• Not 50%-70% (or less) from cash offer

• Not 80%-85% (or less) from MLS

Renters become Home-Owners!

You help set new HIGH COMPS in neighborhoods!

180

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=OaSzfwWydbP72M&tbnid=1j0T4F04p8s-LM:&ved=0CAUQjRw&url=http://commons.wikimedia.org/wiki/File:Blank_map_of_the_United_States.PNG&ei=A9uyU8WlI4qayASlpoC4CQ&bvm=bv.70138588,d.b2k&psig=AFQjCNE7votZYDpF0SFV7fRfs0vv4443uQ&ust=1404316794539918

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=OaSzfwWydbP72M&tbnid=1j0T4F04p8s-LM:&ved=0CAUQjRw&url=http://commons.wikimedia.org/wiki/File:Blank_map_of_the_United_States.PNG&ei=A9uyU8WlI4qayASlpoC4CQ&bvm=bv.70138588,d.b2k&psig=AFQjCNE7votZYDpF0SFV7fRfs0vv4443uQ&ust=1404316794539918

8/19/2014

61

An Average Option Fee is between…$5,000 and $6,000 per deal…and these deals are

everywhere!!!...

1 per month = $60,000 - $72,000/yr2 per month = $120,000 - $144,000/yr3 per month = $180,000 - $216,000/yr4 per month = $240,000 - $288,000/yr5 per month = $300,000 - $360,000/yr

Remember there is very little operating overhead, so it’s practically all profit!!

Link Options = Great Cash Flow $$$with Little to No Risks!!

181

…So, Do We Have a Course to Sell???

182

…of Course we do!!!

We want everyone in this room to experience the lifestyle you desire!

…and So Does Chrysalis!!

183

8/19/2014

62

Testimonial - Jerry B.Hey Keith and Shannon!

Wanted to let you know I closed my first deal this week. I saw WendyPatton a few hours later at our REIA meeting and told her this was oneof easiest strategies to implement from start to finish.

Thanks to you and Shannon for the detailed videos. It helped me toconnect the dots. I can easily see doing 1-2 deals a month even with myschedule.

It took about six weeks from the time I ordered your course to close myfirst deal. My goal was 60 days so I hit that with time to spare.

Have a great night and thanks for your detailed work with the linkoptions course.

184

Jonathan F. Testimonial

To anybody who is on the fence about going full force into this business, trust me, this is the way, and so is this course.

This course teaches you how to be an actual player in the real estate investment business. I say this because many investors are not familiar with this way of structuring lease option transactions and making it work.

185


Truth is, you don’t have very much competition, and a lot of your competition is not doing these deals the right way.

Shannon and Keith teach you how to do it the right way and make it a legitimate business model.

More importantly, this is a gateway strategy that allows you to capitalize on other real estate investment opportunities.

186

8/19/2014

63


From my own personal experience, if it weren’t for this course and Shannon and Keith’s accessibility with answering questions, I wouldn’t have had the confidence to put my thoughts into action and take that first step into this business.

Now, I’m going out finding sellers, and have established local partnerships/mentorships that I know will help fuel my success in this business!

Thank you! Jonathan

187

Yes, there is a SPECIAL BONUS for buying at this boot camp!!

We will cover all that at the end of our boot camp !

…So…What’s the Price???

$1,497You Should Make 3-4X+ this on your

FIRST deal!!!!

188

Steps to Link Options

1. Marketing, marketing, MARKETING…for sellers

2. Seller and you sign:

– Cooperative Lease Option Agreement

– Option Agreement + Addendums

– Sales Contract

189

8/19/2014

64


3. Marketing, marketing, MARKETING the property for rent-to-own/lease-option…to tenant-buyers

4. Find a TB & pre-qualify them

(Put the TB in credit repair if needed)

5. Get funds in escrow

– option fee and full first month’s rent

190


6. Assign paperwork to TB

7. Rental Agreement/Lease signed between TB and owner

191


8. Get Paid! – Disburse the upfront option consideration to your company as your fee (non-refundable*)– *Refundable from seller (not you), only if seller breaches

the contract

192

8/19/2014

65


9. Disburse to the seller, full 1st month’s rent

10. Move onto the next deal

Repeat, Repeat,

REPEAT!

193

Real Deal

•

•

•

•

•

•

•

•

•

•

•

•

194

Notes to Remember

• You can easily work with other Agents & everyone gets paid

• Keep actively networking with Investor-Friendly Agents, especially their challenged listings

• Listen to TB’s needs and desires

• Appraisals are Unpredictable

195

8/19/2014

66

Real Deal #21. Seller Source: Owner’s Craig’s List Ad for Rent

– ARV $210,000 - nice homeowner neighborhood– Current renters were moving out– Sellers OK w/either a strong renter or a TB whichever came 1st– Sellers in Costa Rica for last 3 years

2. Tenant/Buyer Source: Zillow (via vFlyer)-- Job relocation and under a deadline-- Husband saw in person, but wife relied on YouTube video-- Short on the asking down payment, but strong income

3. $2,200 Down & $1650.00/mo -- $209,900 purchase price-- $400.00 EXTRA added to down payment each month-- After 18 months: $9,400.00 down, Seller getting $3,000.00

4. $6,400 total Profit ($2,200 up front & the rest over time)

5. All communication w/sellers & TBs done via Skype, email, phone, and fax

196

Down Payment Over Time

Typically, we don’t like to do down payments over time

– In 95% of our deals, we get the full down payment upfront

197

Link Options are Flexible

• RTO is designed to be very flexible

• Use judgment when creating an atypical arrangement

• Consider the circumstances

• Disclose everything & have seller make final decision

198

8/19/2014

67

Link Options are Flexible

For example, in this situation

• Sellers were willing to take a renter

• Sellers wanted to keep some personal items in the house longer

• TBs had strong income and were very diligent throughout the entire process

• An atypical arrangement, but everything was disclosed & everyone was happy

199

Working Without a License

We strongly urge you to get your

real estate license!…and depending on your State, you may

HAVE TOO!

200


If you don’t want to get your license, then:

• FIRST, determine if you can function as a principal in the transaction without a license in your State?

• You SHOULD get an attorney in your State to advise you!

201

8/19/2014

68


If you don’t want to get your license, then:

• Build a good rapport with a Realtor who will work with you

• Bring on a partner who is licensed

• Disclose that you are NOT an agent

202


If you don’t have a license…DON’T EVER:

• Attempt to operate as a principal in a State where this is prohibited

• Represent yourself as licensed or indirectly lead anyone to believe you are

• Market to Realtor-only listings

• Market a house that is already listed with a Realtor, without getting permission

203


If you don’t have a license, then…DON’T EVER:

• Take a Realtor’s sign down

• Put your sign up in the seller’s yard alongside the Realtor’s sign

• Abuse your MLS access; Don’t

– List properties in the MLS, or

– Share your password with anyone

204

8/19/2014

69

Seller Negotiating Tips

• Ask Questions

• Listen

• Understand

• Empathize

• Clarify

205

Talking with Sellers

Key points in conversation

• Find out what they NEED

• Ask what they have tried to do to sell and/or rent the property

• Find out if it’s listed with a Realtor

• Be confident, not desperate, and positive

• It’s not about you, it’s about them…and how you can help!

206

Talking with Sellers

Tell seller the good news – the benefits

• Full price offer

• “As-Is” sale

• Typical seller nets 20%+ over traditional sale

• No out of pocket costs for service

• Not an exclusive listing agreement

• We have NEAR-BANK qualified TBs now

• Repairs & maintenance handled by TB

• TBs make better occupants than rent-only tenants

207

8/19/2014

70

Key Conversation Points

• Keep it simple

• Build rapport & trust

• Get some more information about the home

– Ask about the price points they need

208

Key Conversation Points

• Don’t feel pressured to “close” them on the phone

• Get them to say “yes” to scheduling a time to meet at the house

• At least get them to commit to you sending them more info in an email

209

Follow up Email to Sellers

• Summarize the benefits of your service

• Provide them a link to your website

• Give a link to a YouTube video of you explaining the lease-option program

• Ask the seller how they want you to follow up with them

• BE SURE TO FOLLOW UP IF YOU DON’T HEAR BACK FROM THEM IN A DAY OR SO!!!

210

8/19/2014

71

Powerful Information –Send the seller a

Comparison Spreadsheet:

What they would make Selling through a Realtor

vs. Rent-To-Sell

211

How Much Is A Little Flexibility Worth?

Average Net Selling Via Realtor Average Net Selling Via RENT-To-SELL

Full Retail Market Value 330,000.00$ 330,000.00$ Full Retail Market Value

List/Asking Price 320,000.00$ 330,000.00$ List Price

(Priced competitively/NOT full retail) (Full retail value)

Selling Price 297,600.00$ 330,000.00$ No Low Ball Offers!

(Offers average 93% of Asking)

Realtor Commission (14,880.00)$ (13,200.00)$ Tenant-Buyer Down Payment

(Average range: 5-6% of Sales Price) (Average 4%--our fee)

Seller Help (17,856.00)$ -$ No Seller Help!

(6% maximum allowed)

Seller Closing Costs (5,952.00)$ -$ Tenant-Buyer pays ALL Closing Costs

(2% average…depends on County)

Requested/Required Repairs (2,976.00)$ -$ Tenant-Buyer takes AS-IS

(1% average)

Gross Sale 255,936.00$ 316,800.00$ Gross Sale

Percentage of Asking Price 80% 99% Percentage of Asking Price

Percentage of Retail Value 78% 96% Percentage of Retail Value

Subtract Loans (250,000.00)$ (250,000.00)$ Subtract Loans

NET TO YOU! 5,937.58$ 66,801.95$ NET TO YOU!

Difference! Difference!60,864.37$

Selling Traditionally vs Selling Thru Link Option

212

Answering Objections

• Sometimes you just can’t satisfy a seller or overcome their objections.

• It’s doesn’t happen very often, and it’s okay!

– Move on to the next one…

213

8/19/2014

72

Answering Objections

• Don’t panic if you get stumped…

• It’s okay to respond:

– “That’s a great question. I have a couple thoughts, but let me get back to you tomorrow after I discuss this with my business partner.”

• Try to understand what their true objection is about?

214


I don’t want to be a landlord!I dislike renters!

215

What if my home goes down in value?


216

8/19/2014

73

Why would I RTO vs. sell outright?


217

What if they don’t buy?(I really love this when they are marketing the house for rent already)

What if they tear up the house?

What if they don’t pay the rent?


218

How do you get paid?

Do I get part of the Option Fee?


219

8/19/2014

74


What if I rent it first?

What if my Realtor brings me a renter or buyer?

May I list with a Realtor?

220

Common Seller Objections and Questions

How do you set the purchase price and the monthly rental amount?

Why can’t your clients just purchase now?

221

The #1 Goal is a

Seller Wins

You WinBuyer Wins

WIN WIN WIN

Otherwise…

Walk Away222

8/19/2014

75

Scheduling Initial Property Visit

When first starting out, go to the property yourself!

If doing remotely:

– Get paperwork signed before you pay for someone to take pics and a video

– Alternatively, you can get the seller to take pics and put a lock box on the door (that’s what we do!)

223

Paperwork Needed Before Marketing to TBs

Assuming you are in a State where assignments are legal:

• Cooperative Lease Option Agreement


• Sales Contract if Necessary

224

Other Necessary PaperworkAddendums

Will need prior to assignment to TB:

• Seller Disclaimer & Disclosure

• Lead Paint Addendum

• Other misc addendums (e.g., HOA)

• Authorization to Release Lending Information

• Affidavit of Liens

• Memorandum of Option*

225

8/19/2014

76

Initial Property Visit

Property Information Worksheet (fill out as much as possible, and leave with seller to complete

and fax/email back to you)

– Home layout and all amenities

– Community/Neighborhood features

– HOA info, if applicable

226


Property Information Worksheet (cont.)

– Talk about a Home Warranty

– Discuss any rental requirements

• lead certificate, rental license, etc.

– Review comps and confirm option price and monthly rent

227


Other things to bring with you

Seller Packet

Digital camera

Video camera – this will help brand

you more than anything else

228

8/19/2014

77

Video is a Powerful Free Marketing Tool for Branding your Business!

229

Finding the Buyers

230

Qualifying Characteristics of TB

• Down payment MIN of 3.5% or $5K, whichever is greater– Of course, the more the better!!!

• Willing to enroll into credit repair– www.LeaseOptionCreditRepair.com– (Sign up now and you’re set)

• Ability to save up for future closing costs– Less any Seller credits est in RTO agreement

231

http://www.leaseoptioncreditrepair.com/

8/19/2014

78

Qualifying Characteristics of TB

• Income supports the future loan (3-4x rent)

• Lendable debt-income ratio

• Good job history (2 yrs same work)

• Acceptable rental & background check

• High probability of bank loan in 18 mos or less

232

Give your Buyers Choices

Build an Inventory of Homes - Don’t just get one house, and then

quit trying to find sellers

233

Steps to Start Marketing for Buyers

• Get your pictures and video ready

• Get an account with Craigslist and www.vFlyerAccount.com– Use the code “buybaltimore” to get a discount on

the paid version

• Setup a FREE website or have one hosted for about $5/month

• www.LinkOptionWebsite.com

• At a minimum, setup a FREE YouTube, Google+, and Facebook account

234

http://www.vflyeraccount.com/

http://www.linkoptionwebsite.com/

8/19/2014

79

Marketing On a Shoestring Budget

During startup, plan on $100 - $400/mo• ~ $100-$250/mo marketing for sellers (direct

mail/Yellow Letters, Bandit signs/Car marketing, Craigslist marketing)

• ~ $25-$75/mo marketing for buyers (vFlyer and Bandit signs)!

• ~ $5-$50/mo for website, squeeze page, CRM database hosting

• Today, we spend < $50/mo (use mostly FREE stuff)

235

- In front of the property- Around the neighborhood that point to the property

(10-20 per house)- General signs that drive buyers

to a website or squeeze page

Roadside/Bandit Signs

236

Lead Generation Websites

Explanatory Video -------->

Lead Capture Form ------->(Populates a CRM / Database)

Written Info --------------->

Squeeze Pages/Lead Capture Sites

237

8/19/2014

80

www.vFlyerAccount.comvFlyerautomatically posts to all of these other popular property listing accounts

Most of our buyer leads come from Zillow, Trulia, and Hotpads!

238

www.vFlyerAccount.com•Each flyer has it’s own unique URL•Links to social media•Links to website•Links to video•Has picture gallery•Create different layouts•Print out fliers•Can share it via email•Can use instead of a website

239

Tie Social Media to WordPress Site

240



8/19/2014

81

The Power of WordPresswww.LinkOptionWebsite.com

Opens NewPage for Each

ListingAnd YouTube

Video

GoogleMapsPlugin

Social Media Links

241

YouTube Testimonials on WordPress

YouTube Testimonials

242

Use www.vFlyerAccount.com to Post to WordPress

Just take the embed code right off of vFlyer and save hours posting to WordPress!!

243

http://www.linkoptionwebsite.com/

8/19/2014

82

Put Your Property Videos on YouTubewww.YouTube.com/baltimorehouses

Notice the playlist with all of our RTO videos

244

Have a Playlist for all of Your Active Rent-To-Own Homes

http://www.youtube.com/playlist?list=PL598264BA8464F057

You can email or post this playlist link anywhere for people to view all of your listings

Get your Playlist link here

245

Social Media Ranks High in Google

Especially, any postings made to YouTube and Google+

246

8/19/2014

83

#1

#4

247

Google owns YouTube and videos help you rank high and fast in organic searches

248

What to Put in Your Property Ads?

• Unique selling features of the home

– Remember the Property Info Sheet!

• Several pictures & a video

• Local phone number (Google Voice)

• Link to your website w/list of properties

• “Flexible terms for strong applicants”

249

8/19/2014

84

What to Put in Your Ads?

• The rent, rent credits (if any), and option price

• Advertise the minimum option consideration (% and $ amts)

• “Challenged credit is okay!”

250

Take Calls and Manage Emails

• Post to vFlyer, Craigslist, social media, and put out signs and get ready!!!

• Have all calls come into a local Google Voice number (voice.google.com)

– Forward to a call service if you can’t answer the phone

• Organize email folders by property and track buyers somehow

251

Answering TBs Questions

• How does your program work?

• Is bad credit okay?

• Can you help with credit repair?

• How long do I have to purchase?

252

8/19/2014

85

Answering TBs Questions

• What’s this down payment/option fee?

• Do I need all money upfront?

• Do you check my credit?

• Does any of the rent go towards the house?

253

Text & Email Follow UP

If you are not able to call your tenant-buyers back immediately, then implement an efficient text and email follow up system

254

Get the TB to fill out an Application or Showing Request

• If you are limited with time, get the TB to fill out info on your site

• If you don’t have a website, email a manual application

• …But filter the ones worth calling back!...

255

8/19/2014

86

Showing the House

• Review application on phone with TB

• Verify they understand the RTO process and down payment

• Coordinate for them to see the house

256

Five Ways To Show A Home

• Have the seller show it

• Hire a Realtor or assistant

• Lockbox

– Only after they submit an application or SR

– They MUST call when they are leaving the house!!!!

257

Five Ways To Show A Home

• Schedule open houses

• Meet the TB at the house, ONLY after:

– They have driven by or seen pics & video

– Application received and talked with us

– Double confirmed appointment

258

8/19/2014

87

Get Their Feedback

• If the buyer does not like the house, ask questions!

– What did you like & not like?

– What exactly do you want?

• Enter comments into database and continue to follow up with them

259

Important Note

Many of our placements are from buyers that we follow up with over time!

260

Review and Approve Applicants

Main Criteria we use for TBs

• Credit report

– Appears lendable by option expiration date

– No recent serious credit issues

• BK, Foreclosure, Short Sale

261

8/19/2014

88


• Down payment + 1st month’s rent

– The greater of 3.5% or $5K

• Income supports the rent/future loan

– 3-4 times rent

262


• Job history

• Rental verification

– No evictions

– Rent on time for at least last 12 months

– Good references from current/past landlords

• Criminal background

263


• Unless they have a recent lender’s credit report, pull one yourself

– www.AnnualCreditReport.com

• Have mortgage broker/lender pull one

• Forward to Clean Slate for review

– www.LeaseOptionCreditRepair.com

264

http://www.annualcreditreport.com/

http://www.leaseoptioncreditrepair.com/

8/19/2014

89


• Encourage them to get into credit repair

– Make part of approval requirement

– Can count as part of down payment!!!

• Forward complete file to seller to discuss and get their approval

265

Finalizing Paperwork

Assign contracts to TB

• Meet with the seller & TB:

– Introduce parties

– Answer questions

– Review your ongoing role

• Eventually, can all be done remotely with digital signatures (e.g., HelloSign)

266

Finalizing Paperwork

Release funds from escrow & provide escrow release documents

– Option consideration to you

– 1st month’s rent to seller

267

8/19/2014

90

Real Deal #3

268

Real Deal #3

• Details

– House ARV = $420,000

– Listed with Realtor on MLS for 6.5 months with very few showings and one contract that fell through at the closing table

– Lead source = Craigslist for rent

• Software picked up lead within minutes of it being posted

269

Real Deal #3

• Seller owed about $250K and was current on pmts

• Seller wanted to net $400,000 & $2,695/mo

• Option target range advertised (3%-5%) = $12,600-$20,995

• Rent Credits = $0

• Option Price = $419,900

270

8/19/2014

91

Real Deal #3

• Seller still lived in the house and just wanted to move to another State

• Very nice 2006 custom built home, 2,600 sq ft not including fully finished basement

• In exclusive golf community with elaborate residence center

271

Real Deal #3

• Home had $30k home theater system, wet bar, central vacuum system, and high end upgrades throughout

• Medium to Higher-end price range for area in the County

• Encouraged seller to keep listed with a Realtor to give him all options, but he refused – he loved our strategy and was not distressed

272

Real Deal #3

• Marketing– No sign in yard and no direction signs

– Took lots of pics and video

– Posted on vFlyer, YouTube, Google+, Facebook, LinkedIn, Twitter, and WordPress website

– TB found our YouTube video on a Google search

– We met TBs at house with seller to show

– Took a total of 3 weeks to find TB!

273

8/19/2014

92

Real Deal #3

• Tenant-buyers

– Make over $200,000/year

– BK discharged 6 yrs ago and Foreclosure 5 years ago

– Husband professional engineer for Fortune 10 company and wife is a disabled paramedic supervisor

– Long job history in same field

– Credit scores almost 700

274

Real Deal #3

• Receiving a lump sum payout of $250,000 in less than one year, and plan to buy home in less than 12 months

• They just loved the home and were not ready to deal with looking for a mortgage at this time, so RTO fit them perfectly

275

Real Deal #3

• Tenant Buyers

– Signed 2 year lease option agreement

– We met with the seller and TBs for them to sign the Rental Agreement and Option to Buy Agreement

– TBs put $15,295 into escrow

• $5,390 to seller for 1st months’ rent and part of option fee

• $469 to cover home warranty

• $9,436 to us for our fee

276

8/19/2014

93

Real Deal #3

• TBs had a total of $12,600 counted towards down payment/option consideration

• TBs signed escrow release documents

• TBs also purchased majority of seller’s furniture

• TBs have emailed our YouTube video to all of their friends and family inviting them to come visit

277

Real Deal #4

278

Real Deal #4

Details• House ARV = $270,000• Listed with Realtor on MLS for 6 months with no

offers and no showings• Lead source = Realtor referral (from Facebook)• Seller had no mortgage• Seller wanted to net $250,000 & $1,795/mo• Option target range advertised (3.5%-6%) = $9,450-

$16,195• Rent Credits = $0• Option Price = $269,900

279

8/19/2014

94

Real Deal #4

Details• Very nice home in country on 3 acres of land, but

location was very far out for most people, and the surrounding homes for sale were new-builds

• House was built in 1957, and inside was amazing, but dated

• Tough competition for Realtor listing• Informed seller location could pose a challenge, but

it’s a beautiful home• Median priced home for County• Encouraged seller to keep listed with a Realtor to give

him all options, but he refused – he loved our strategy and was not distressed

280

Real Deal #4

Marketing• No sign in yard and no direction signs• Property was vacant• Gave lockbox code to TBs to view home• Took lots of pics and video• Posted on vFlyer, YouTube, Google+, Facebook,

LinkedIn, Twitter, and WordPress website• Started getting applications and showing the property

in about 2 days• TB found us on Trulia.com via vFlyer posting• Took a total of 5 months to find the right qualified TB!

281

Real Deal #4

• Tenant-buyers

– Make over $80,000/year

– Short sale on record

– Husband is truck driver and wife is medical tech

– Long job history in same field

– Credit needed some clean up

– Enrolled in our credit repair referral program

282

8/19/2014

95

Real Deal #4

Tenant Buyers

• Signed 2 year lease option agreement

• We met with the seller and TBs for them to sign the Rental Agreement and Option to Buy Agreement

283

Real Deal #4

Tenant Buyers

• TB put $12,995 into escrow

– $1,795 to seller for 1st months’ rent

– $2,000 to Realtor referral (20% of our net)

– $369 to cover home warranty (our cost)

– $1,200 for credit repair (2 people)

• $240 referral fee to us

– $7,631 to us

284

Real Deal #4

Tenant Buyers

– TBs had a total of $11,200 counted towards down payment/option consideration

– TBs signed escrow release documents

– Everything is out in open

– Everyone wins!

285

8/19/2014

96

Reality Check

We are reading more and more in the news where Americans are “expected” NOT to take their vacations and work longer hours…and are constantly in fear of being laid off = STRESS!!

286

Exert from USA Today

“More Americans…will stay at their desks this year…the nation’s nose-to-the grindstone culture…has resulted in many Americans leaving vacation days on the table…we are a hard-working lot…ambitious…not taking all the vacation time that’s available has become an American trait”

287

• Fulfill our Life Vision

• Enabled us to build a business around our life– Our business serves us!

• Eliminate Stress and Risk From our Life

• Take lots of time off

• Allowed us the free time to create other related businesses, such as coaching

What Has Link Options Done For Us?

288

8/19/2014

97


No JOB!

Freedom!

289

• Wipe out Debt and Start Saving/Investing Money

• Discontinue Leveraging any Money

• Create Win-Win Situations for Everyone


290

Link Options Clients vs. Traditional Clients

291

8/19/2014

98

There is no easier way in real estate to make QUICK cash and with little to no competition!

$3,000 - $6,000 in 30-60 days???Yes, Yes, Yes!!

This business is too EASY!!

292

How Can You Get Started?

293

• We have a Link Options Online Training Program Unlike Any Other Product on the Market

• Many Other Gurus Have Said It’s Simply Revolutionary How We Present Our Training and Are Going To Do Theirs The Same

• Students Are Telling Us It’s The Most Logically Thought Out, Complete and Easy To FollowTraining They Have Ever Seen

Getting Started

294

8/19/2014

99

Hello Team, “I am new to the forum but I have to say this is by far the best

organized information product I have ever purchased. I have probably

invested close to $30K in information products not including coaching, and

again, by far this is the best I have seen.” – Milton L.

New Student Comment in Member’s Forum

295

-------- Original Message --------Subject: RE: New Link Options Member - Matt Marqua, 203-258-xxxxFrom: Matt Marqua <[email protected]>Date: Sun, March 03, 2013 9:51 amTo: Keith and Shannon French <[email protected]>

Hi Guys,

Bravo!! Your training website is top notch - well laid out, thorough, and intelligent. (Unlike many training materials I've seen!) So, thank you!

Matt M. (alias 'Bill Clinton')

296

-------- Original Message --------Subject: Contracts and forms/ Marco GravinaFrom: "Marco Gravina" <[email protected]>Date: Sun, February 10, 2013 9:36 pmTo: "Keith and Shannon French" <[email protected]>

Keith and Shannon:

I want to congratulate you for the excellent training course.

Al and I have gone through several courses including _______’s, and yours is a lot easier to follow and is more "hands on".

Thanks for all your help.

Marco

297

8/19/2014

100

“Wow, I’ve have not even mailed out 200 of your Yellow Letters yet, and I already have 7 sellers interested in

Link Options!!”

This was within 5 days of buying the course!

New Excited Student Phone Call

298

“Well, the phone has been blowing up since I started hammering the direct mail/craigslist leads. I started the CL leads last night, got a call last night, went to see it today and will be signing it up with the owner Saturday (heading out of town to hike for 2 days)...so, to recap this week's (and last's) activity, sent out about 120 letters, did direct marketing to craigslist to the tune of about 10 last night...I had about 17 calls…I have 9 properties I'm working proposals up for, and 3 other people I'm playing phone tag with....not a bad week...” – Mike H.

What Link Options Purchasers Have to Say

299

-------- Original Message --------Subject: RE: Keith and Shannon French shared "Link Options MasterDocuments”From: Marjorie Binder <[email protected]>Date: Thu, October 24, 2013 5:15 amTo: "[email protected]" <[email protected]>

Dear Keith and Shannon,

All I can say is Wow! I am just awed by how much information you guys provide for such an incredibly incredibly reasonable price.....thank you!!

Marge

300

8/19/2014

101

-------- Original Message --------Subject: Adam Olsen TestimonialFrom: "Keith and Shannon French" <[email protected]>Date: Fri, April 26, 2013 12:16 pmTo: "BuyBaltimoreProperties.com" <[email protected]>

Hi Keith and Shannon. Well, it's official, I finally cashed out of my first deal and can't believe how smoothly it went! (knock on wood for the next deal!) I wanted to tell you first and THANK YOU BOTH VERY MUCH for all your help to get me to this point. I can't tell you how much I appreciate it. This money that I made is so huge for my family and me right now.

Adam

301

-------- Original Message --------Subject: Re: Tonight's Link Options Call Reminder - 7pm CST/8pm ESTFrom: "[email protected]" <[email protected]>Date: Thu, August 08, 2013 4:21 pmTo: Keith and Shannon French <[email protected]>

Hey Keith,Sorry, but I won't be able to make the call tonight. I'm on vacation w/ the fam. Will catch up with you all next go-around....Hoping to close deal #2 next week and deal #3 is in the works! WooHoo!Have a great rest of your week!Thanks,Adam

302

-------- Original Message --------Subject: SMS from Ryan Gauthier [(410) 903-xxxx]From: "Ryan Gauthier (SMS)"<[email protected]>Date: Mon, April 22, 2013 12:30 pmTo: [email protected]

Hey by the way I owe you guys a HUGE thank you! I closed the first LO deal while we were out of town!!!

Thank you!Ryan

303

8/19/2014

102

• We decided to develop a one-of-a-kind online training

that would emulate hanging out with us for at least two

weeks

• We wanted to provide you with everything you will

need to implement this strategy

• We decided to cover an unprecedented amount of

material in our real estate training course, setup very

much like a college curriculum

Theory In Developing Course

304

• Having a personal coach with you at all times;

• Receiving as much or more content than you would get at a 4-5 day boot camp;

• Getting a home study course, but much easier to follow and understand;

• Having access to instant updates, down loadable contracts, and a FREE active member’s forum to ask unlimited questions

What is Unique about our Course?

...It’s Like:

305

Link Options TrainingStep by Step Tutorials in Order of Implementation

306

8/19/2014

103

Link Options TrainingMultiple drop down boxes packed with videos, screen flow examples, downloadable and editable contracts, recorded live phone calls with sellers and buyers, role playing, scripts, recorded live closings, case studies, etc.

307

Link Options TrainingLive role playing handling all seller and buyer objections

Downloadable scripts

308

Link Options TrainingFREE member’s forum to ask unlimited questions under the Updates/Extras tab!

309

8/19/2014

104

Recap of What’s Included

• Recorded live seller & buyer calls, plus downloadable scripts & live role plays

• Recorded live closings, staging properties, making and putting out bandit signs, etc.

• Downloadable & editable contracts & forms for everything you need

• Live demonstrations of pulling comps, doing tenant screening, going through each line of our contracts

• How to setup an escrow account

310

Recap of What’s Included

• All of our marketing strategies, including Yellow Letter, Craigslist, voice & text blasting, social media & internet marketing

• Setting up websites and squeeze pages with non-branded videos for you to insert into your own marketing

• Very detailed case studies

• Wendy’s entire Cooperative Options course, including downloadable contracts

• The list goes on and on!!!

311

Content, Content, Content!!!

It’s Literally Like Spending at Least Two

Weeks with Us Doing Every Single Aspect of

This Real Estate Strategy

$7,995 Value

What Would Spending Two Weeks With

Us Be Worth To You?

What is Included in our Course?

312

8/19/2014

105

Unprecedented Content!!!! Value

Like Having us as Your Personal Coach for at

Least Two Weeks$7,995

FREE On-going Support Through Our

Exclusive Member’s Forum$197/month++ ($2,364 annually)

All of our Contracts, Case Studies, Marketing

Material, Internet Marketing Strategies,

etc….like a 4-5 day bootcamp + home study

course

$2,997

3-Day Bootcamp with Wendy Patton & Keith

and Shannon French + Wendy’s Entire

Cooperative Options Course

$1,997

Total Value of LinkOptions Training -

$15,353!!!


313

But Wait…That’s Not All!!!

Wendy is giving you another Incredible

Bonus worth

$994!314

Only For Those Who Purchase at This Event!!

315

8/19/2014

106

Wendy’s Special Bootcamp Bonus!!!

If you find deals where you want to stay involved in the

transaction because it has equity and/or you want to build a

portfolio of rental homes, then Wendy is giving a HUGE

BONUS!!!

316

Wendy’s Special Bonus!!!

317

…and another $500 Bonus!!

Lease Option and Link Option Coaching with Jim Aydelotte

318

8/19/2014

107









course

$2,997




$1,997

Bonus!!! - Wendy’s Buying on Lease

Options Course and Selling on Lease

Options Course!!!

$994 (Bootcamp Special Only!)

Bonus!!! – Jim Adydelotte Lease Option and

Link Option coaching$500 (Bootcamp Special Only!)


Total Value - $16,847319









course

$2,997




$1,997

Bonus!!! - Wendy’s Buying on Lease Options

Course and Selling on Lease Options

Course!!!

$994 (Bootcamp Special Only!)

Bonus!!! – Jim Adydelotte Lease Option

and Link Option coaching$500 (Bootcamp Special Only!)


Total Value - $16,847320




FREE On-going Support Through Our Exclusive

Member’s Forum$197/month++ ($2,364 annually)




course

$2,997




$1,997

Bonus!!! - Wendy’s Buying on Lease Options

Course and Selling on Lease Options Course!!!$994 (Bootcamp Special Only!)

Bonus!!! – Jim Adydelotte Lease Option and

Link Option coaching$500 (Bootcamp Special Only!)


Your Price - $1,497

321

8/19/2014

108

Join Us In The Back of the Room!

Thank you for your participation!

322

Thanks so Much!!

Survey - Please

323