Have you ever wondered what the heck you were going to do with “those” rental properties on your list that you’re just tired of dealing with? Well, these properties had become a massive headache to this lady and her husband. (see link to video at bottom of article) They were tired of managing these five properties and just wanted to unload them, so JimmyZ came to the rescue:)
“Jim, do you like headaches?”
You’re probably asking yourself, “If these properties were such a to them, why in the world are you taking them on?” Well, four out of the five properties have a positive cash-flow of $300/mo, so I’m starting off with a positive cash-flow situation…which is always good;) My plan is to convert the current tenants into tenant-buyers. Say huh??? That means I’ll approach the existing tenants and ask them if they’d like to own the home, then once they say “yes” we’ll do the property paperwork to make that happen, which most likely will be a lease-option scenario.
So what’s so great about selling on a Lease-Option?
The beauty of “selling” a house on a lease-option is that the tenant/buyer is responsible for all maintainence and repairs on the property! It’s like having all the benefits of being a landlord without having all the crap that usually goes along with it! What about vacancies? Well, since we’re starting off w/ one vacant house, in a matter of a few weeks we’ll have a decent buyers list for that neighborhood, so if/when house does become vacant, I’m confident that we’ll be able to fill it very quickly.
Why didn’t the sellers do this themselves?
So you’re aware, I was very open with the sellers and disclosed everything that I was going to do with the properties. I even offered to coach them for 6 months and help them do the deals! They appreciated the offer, but wanted nothing further to do with these houses — they are burnt-out! More to the point, they have only done one lease-option before and did not feel confident in doing five all at once.
Lessons to be Learned (by you!)
So what can you learn from this story? I think there are 3 crucial points that can be taken away from this:
1 – Get help! Problems don’t solve themselves. These people were wise enough to bring in someone to take care of their problem for them. If you are in this situation, either learn how to fix the problem yourself or contact someone like me to take care of it for you.
2 – Tenants Suck!Ok, that is an over-statement, but I’m sure we can all agree that one of the biggest sources of headaches for real estate investors is tenats. I have a small handfull of “normal” tenants, but most of my tenatns are tenant/buyers to whom I’ve sold a house via Lease-Option. It truly is the best way to get a premium sales price, premium rent each month, and a stress-free (almost) residual income.
3 – Education is key in this business. Not as important (in my opinion) as implementation, but crucial, nonetheless. There is nothing about me that qualifies or enables me to fix this problem that these five houses presented, other than the vast amount of education (and experience) I have committed myself to in this business.
I hope you enjoyed and benefited from this blog! If you did, please “tweet” and “like” it on your social media tabs above.
To our success,
P.S., here’s the video testimonial of this seller: http://www.youtube.com/watch?v=L0WckotSteQ