Understanding the Benefits of Selling with Lease Options
During my early years as a real estate investor I heard the words lease option quite frequently. Upon further inspection I realized that the reason I was hearing the term so often was because the technique is one of the most powerful ways to sell a home. It is important to note that while selling on a lease option is probably the best way to sell in most situations, it probably should not be your first choice as far as creative buying techniques are concerned. The reason for this is simple...when you buy on a lease option you do not have full ownership of the subject property until the deed has changed hands. As you are probably aware, that does not happen until the original owner is paid in full. A much better way to buy is “subject to” an existing mortgage, which is a fascinating subject that will be addressed thoroughly in a future article. This article will deal with selling your property using the lease option technique. I will start by walking you through a typical lease option sale and then go into further detail on how to increase your monthly cash flow and back end profit using this powerful technique.
After I have acquired a new piece of property, whether it has been purchased subject to an existing mortgage, bought outright or I have entered into a lease with option to purchase with a seller, my single most favorite way to sell the property is on a lease option. There are many reasons I prefer this technique of selling over others. The first reason is that I retain ownership of the property while increasing my monthly cash flow without having to deal with minor maintenance issues. The second reason is that I know I will get a price higher than the current market value for the sale of the house and I will also receive a monthly payment that is higher than if I were to rent the house to a tenant. For discussion purposes, I will begin illustrating this technique with marketing the property and take you through moving the tenant/buyers into the home.
I prefer to run an occasional ad on a regular basis to locate potential tenant/buyers and build my buyers list. The advantage to doing this is that as soon as I get a new property I can send a simultaneous fax and/or email to the prospects on my list. Doing this usually gets the house occupied quickly with minimal effort. The standard ad should read something like the one below:
HOUSES FOR SALE
RENT TO OWN
Down Payment Assistance
(407) 555-1212
After placing the ad, my phone begins to ring. I recommend using a voice mail system to prequalify all callers. I explain on the voice mail that I often have houses available to purchase using my rent to own program. I continue to explain that I need them to leave there name, phone and fax numbers, email address and how much can they afford to put down and pay monthly. I also explain our wonderful down payment assistance program (which will be explained to you in the next paragraph). After collecting names and building a buyers list, I send each prospect a description of the house along with directions so they can take a look. I always have them look at the house by themselves because I do not want to waste my time showing houses to prospects all day. I would rather let them look themselves while I am out finding new deals. After they have seen the house, they contact me to discuss terms. At this point they have usually already mentally moved there furniture into the house and the kids have picked there bedrooms, so you are operating from a position of strength. The benefit to you from setting up your transactions this way is that you are working smart instead of hard and you can use the time you saved to locate new deals.
Now for the exciting part. This down payment assistance program can dramatically increase your monthly cash flow. The way the program works is simply any amount of money the tenant/buyer can afford to pay on a monthly basis beyond the minimum payment will be applied toward their down payment when they go to purchase the home. So for example, if I have a home that I am selling on a lease option and I need to get $800 per month to cover my underlying payment and give myself $150 per month positive cash flow, I will ask $800 per month with the added incentive that anything paid by the tenant/buyer over that amount will not only be applied to the down payment to be used at the time of purchase but my company will also match the amount that is paid over the minimum payment dollar for dollar with our money. It is important that you realize I am not actually using money out of my own pocket, but I will adjust the end purchase price to make it appear as if I am contributing funds on a monthly basis. I always make the end purchase price negotiable based on there down payment and monthly payment. For example, if I was asking $800 per month and the tenant/buyer elected to pay $1000 per month, I would raise the end purchase price by $2400. This is the amount that my company would have contributed had we been matching the extra $200 per month dollar for dollar. The beauty of this is that the tenant/buyer is actually getting a $400 per month credit toward a down payment should he exercise his option to purchase the home (on paper at least). The key to making this work, however, is making sure you do not commit to a purchase price until after working out the down payment assistance plan. This down payment program creates a win-win situation. The tenant/buyer is building a down payment which will make it easier to purchase the home and you have increased your monthly cash flow significantly.
Fortunately, or unfortunately, depending on how you view this, the tenant/buyer often will not exercise there option to purchase the house and you will get the house back. The good part of this is that you get to repeat the process, only with higher numbers this time. The downside, if there is one, is that you do not get your back end profit yet. However, no matter what happens, you will be in a good position.
In closing I would like to note that lease options are probably the most powerful and advantageous ways to sell a property. I have touched briefly on a few of the reasons why they are so powerful in this article, but this is only the tip of the iceberg. Selling on lease options is a topic many authors have written entire books on. They can not possibly be covered from A-Z in one article, but I hope I have at least sparked your interest enough to make you realize that this is a topic that can be used to generate HUGE profits!!
Thanks and happy investing!!
Sean Flanagan
Great thread
I have a comment regarding inflating the rent and the price to give the future buyer a golden bonus. I have sold with the L/O method and in fact wrote one deal so that the option buyer could buy me out any month after month 24 at a price that was set forth and agreed on when signing the contract. ( The price went up every month.
I leased hIm the house for $1200 a month and agreed to apply $200 a month toward the down payment. Problem was, when it came time to finance, the mortgage companies would allow monthly ammounts to apply to the down payment ONLY TO THE EXTENT THAT THEY EXCEEDED MARKET RENT.
So you must be careful when applying portions of the rent to downpayments.
I have sold other Lease Options but must say that in most cases the option is not excercised. I get the property back.
I agree. The article is geared towards charging over market rent to increase cash flw, not the other way around. Thanks for the input.
Best wishes,
Sean Flanagan
Don't tenents who don't excercise the option want thier "down payment" overages back?
Generally the Down Payment is non-refundable. It's all in the wording of the agreement.
When I "sell" a home via lease option, I always make sure that the tenant/buyer knows entering into the agreement that the up front money is 100% non-refundable. Obviously, the way you word this verbally to the tenant/buyer is very important. I prefer to make sure that they understand that while there deposit is non-refundable, I will do everything I can to help them obtain the financing they need. However, it is there responsibility to ask for help when needed and get there credit cleaned up while they are living in the house.
Most of the time they do not do what they were supposed to do and if they can not get the financing, it is no ones fault but there own. As long as you have treated them like equal humans with respect throughout there lease, they will usually go peacefully.
Always make sure they understand the agreement before they move in...that is the key!
how do you get around committing to a sale price.
what if thats the first thing the 'buyer' asks?
Actually, in a true lease option scenario there is always an agreed upon sales price entering into the agreement. I inflate the purchase price to what the market value should be at the end of the lease period. Typically I use 12 month L/Os so I will add in the average appreciation to the current market value.
Other schools of thought say enter into a lease option at todays market price so when the option is exercised, there is equity. I agree with creating win-win situations, but this is leaving to much money on the table. Also, the people who used to preach that philosophy were gearing toward lease optioning houses themselves to buy....which would make more sense.
thanks for writing the article. i'm a novice investor, with no fancy deals under my belt . just a simple deal involving buying a condo at FMV and renting it out to topnotch renters.
i'd like to pursue the LOB. how do i handle people who are interested in the rent to own but dont have any
down payment? do i consider them as simple renters
who are willing to give me a slightly higher than market rent? my understanding is that people with bad credit become good LOB tenants since they put up a large deposit upfront. if they dont have money for a large downpayment , and they have terrible credit, should i just let them walk away???
I'm confused. In your article, you're telling people to inflate their asking price compared to what the tenant/buyer's willing to pay extra each month to artificially create a golden "discount" (which I won't get into the problems with this), yet when asked about this, you say that you only increase the price by the expected appreciation rate (much better answer BTW). So is the article a shame or the comment?
Personally, I disagree with the voice mail system. People like to talk to other people, not machines. You're losing more leads than getting by doing this.
Ditto, for the showings, though you can still limit your time and effort by holding open houses to all who are interested (and create demand, too).
"the tenant/buyer will not exercise there {sic} option to purchase the house," Sadly, sometimes this is true, but if it's happening more times than not, then you're not doing your job. As an investor, your goal should be to actually sell the property, and that includes helping the tenant/buyer get financed.
Roger
Roger,
The first statement you made, "I am confused", is correct. Sadly, it is the only "correct" statement you made. I realize that on message boards there are people at all levels of experience and sometimes the topic may confuse them. In this case, you obviously have become confused. Since you are obviously just beginning your real estate education, you may benefit by asking questions when you are confused instead of trying to expose something that is not there or point out flaws which do not exist.
This article was written to help beginners like yourself, not confuse them. I apologize that you have become confused instead of grasping the concept. Next time I will try to be more clear. Until then, let me clarify a couple things that you commented on...
1) This is a "technique" that CAN be used to increase cash flow. It does not HAVE to be used on every deal. I bought over 40 houses last year and occupied the majority of them with tenant/buyers (some were resold). Out of the 40+ homes I purchased last year, I used this technique on several of the houses. I also used other techniques as well. There is no "golden" discount that really does not exist. I have used this technique with success many times. Sometimes the tenant/buyers are able to get financing and exercise there option. Other times they are not. However, if they ask me for assistance in gaining financing, I always help. I inform them that I will help however I can from the beginning. After that, the ball is in there court. If they ask for help, I give it to them. However, I do not chase them around trying to help them. Take note of that, because you stated that if tenants do not or are not able to buy the home in the end more often than not, then I am not doing my job?
For clarification purposes, the persons "job" who is selling the house is to
1) fill the vacant property
2) collect as much of a deposit as the market allows
3) collect as much positive cash flow as possible
4) assist buyers who want and seek assistance
5) in the end, either collect a big chunk of change when the option is exercised OR repeat the above process
Of course, you should always do your best to create a win-win situation. If you do your "job" then you have created a win-win situation. You have given an opportunity for someone to own a home who otherwise could not, while making a good profit doing it! It is up to each party to follow through on there end of the deal. If the tenant/buyer does not seek help with attaining financing (which they often do not), then I will be fine with having the house back.
2) Again, this is 1 technique of many...not the only technique to be used in every circumstance. My apologies if you got confused on this fact. I thought the article was clear on that, but evidently I was wrong?
For clarification purposes, you will need to have a certain level of skill when using this technique. You will need to be able to get a good "feel" for what kind of person you are dealing with ahead of time. This ties into the voicemail system which you disagree with. See, I already have a feel for the tye of buyer I am dealing with going into the transaction.
Also, when beginning (as in your case) it is always a good idea to have a strategy going into the deal and stick to one strategy. As you progress, you can expand your strategies.
So, to answer your question "is the article a shame or the comment"?....the answer is neither. The correct answer would be each deal will vary and based on your level of exerience and ability to read a deal and person at the same time, you should adjust your technique accordingly. This is fact! If you disagree, you should not only talk to me, but also RON LeGRAND and LOUIS BROWN. They both use and teach this same technique (maybe you know something they dont)?
3) Upon completion of my first real estate transaction I was wise enough to realize that prospects must be prescreened using a voicemail system. I was also wise enough to know that my time was much wiser spent locating new deals and marketing instead of answering a phone all day and night and rushing around town to show picky, nonqualified prospects a property. If you advocate doing so, by all means go right ahead. After you complete your first deal, you will no longer be preaching the way you are now.
Roger- The techniques I use and teach are backed by fact. They work in the real world. They are not just theory. They are also used and taught by people such as Ron LeGrand, Bill Bronchick, Chuck Smith, Louis Brown...the list goes on! This is an area for discussion, not trying to attack people. In the future, please realize that and post your comments accordingly.
I've looked but I've failed to to see where I personally 'attacked' you. I asked for clarification of a point, nothing more. I realize that the wording of my post might produce a knee-jerk reaction, and for that I apologize. However Mr. Flanagan, you responded with a true Guru wannabe attitude, talking down to me, throwing out the big names, listing your number of deals, etc. while only giving a glancing response to the actual post of "it's only ONE technique of many."
Your article and comment totally contradict each other. Frankly, I'm surprised that you fail to see this since a "newbie" like me can.
As far as the voicemail goes, it's a personal choice. I merely gave my opinion. You said that it gives you a "feel" for the buyer. I can get that same feel, or better, by speaking directly to them. Also, voicemail is a passe system that several businesses are weeding out (going back to people answering the phone) because customers, in general, prefer to speak to real people.
And just to clarify, I am an experienced investor. I've responded to over 800 questions on TCI. I personally answer several private emails and messages a day from people wanting answers. I don't teach (translation = sell) anything so I don't have to constantly promote myself to others by telling them how great I am or how many deals I've done.
I will agree with you on one point, this IS an area for discussion. It's a shame that you seem to confuse a discussion as a personal attack.
Roger
Dear Rodger, I like your criticism. What you are saying is that each individual must adjust the instruction to their own use. I never use Voice Mail unless it is to leave a funny message saying to call back at a certain time when I will be home. The Person to Person contact is motivational. Like that word? I couldn't find another one.
The Lease Option must be adjusted to reality as you say. It must be obtainable and the correct figure is a little above present market but not soo high as to become unobtainable to the party wishing to buy. Good thinking.
Of course if your game is total enrichment and an abandoment of the theory of Win-Win and the acceptance of the Theory of Chaos well thats something else agin. Includ me out. I like win-win. I really get upset when someone gets really pissed and straps a string of dinamite sticks around their waist and comes to visit clutching a small detonator in their hand.
Rodger, I have done this 89,750 times. You believe that? No? You get an A in the course.
All these articles and stuff are one man opinion. To really get into the field of Real Estate and stay in it during up times and down times you need to learn a lot of stuff. So learn but test everything they lay on you cause this is present time and that is where you are going to be operating.
You are doing the right thing. Carry on and sniff and examine everything. Of course not me I am perfect, I never made a mistake in my life. Yeah sure. Cheers Lucius
1) Names were mentioned only to show that the techniques work and are promoted by "big" name people (unlike myself) who have proven they do know what they are talking about.
2) If it makes you feel better to call someone a "guru" wannabe, go right ahead. I simply referenced the fact that you sound like you may be in the early stages of your career i.e. a beginner. Everyone must start somewhere and there is certainly nothing wrong with being a beginner.
3) A statement about the number of deals I did last year was made only to point out the fact that there are different techniques which can be used and that the one I wrote on does in fact work.
4) While message boards can be excellent places to learn from others, there is a time when you must go out and actually do deals. The fact that you have responded to over 800 posts in 6 months should make you ( and everyone else reading your response) realize that it is time for you to go out and do some deals. This is fact and anyone who goes out in the field and produces above average results will tell you so.
I actually do go out and find deals every day. I also utilize my time wisely. I know from personal experience that if you are going to produce above average results on a regular basis, you can not possibly sit at the computer all day and post messages on a board and answer private emails.
The top producers in this business are extremely busy putting together deals. I have yet to meet one who has time to post over 800 messages in 6 months AND answer a bunch of private emails every day as you do...while still putting up big numbers (in buying and selling houses....not big numbers on the message boards).
Good Luck,
Sean Flanagan
Again, Mr. Flanagan, you respond with the grace and flamboyance that I would expect. Instead of politely discussing the topic, you choose to direct your response to me, and my apparent lack of knowledge or knowhow in your eyes.
1) The name dropping showed me nothing other than that you know them and that the do indeed sell how to courses in REI, which I've read some of their material and no where do I remember anything like you suggested within your article.
2) You're right. There is nothing wrong with being a beginner. There is also nothing wrong in asking for clarification of a questionable article. Since there is nothing within my posts that reflect in anyway that I am beginner (other than your vain attempts to label me so), I believe that I can correctly assume that you're using that as a childness attempt at sarcasm.
3) How in fact does stating the number of deals you did in any way show any different techniques to L/O and that the method in the article works? BTW, I never said it wouldn't work. I believe that it would work quite well. You'll have tenant/buyers chomping at the bits. I also believe that it borders on usury and is ethically wrong. However, that's just my opinion.
4) Since you keep trying to make this personal, we'll clear it up here. I've been here a bit longer than 6 months (check your calculator, it may be malfunctioning), JFYI. As far as top producers, above average results, and my time to actually start doing deals, please tell it to someone who actually cares about your opinion. IF REI were as hussle and bussle as you make it sound, I doubt many would want to do it over their current job.
Personally, I do 5-10 deals a year. Not your above average numbers I sure. But averaging $25K a deal, I make a pretty comfortable living doing it. I "work" only about 10-20 hrs a week on investing. I spend the rest of my time during the day tending to my 2-yr old, playing golf, visiting family and friends, and, yes, on TCI. I'm sure that I'm beneath you, since you're putting up the 'big' numbers and all. Like I said, though, if I wanted to work 40+ hrs at a J-O-B, I'd stayed in a company. I prefer to spend the majority of my hours having fun with my family.
As far as my posting amounts goes, there are others here that do a far greater number of deals, spend more active time in REI, and still manage to post more than I. I'm sure that you feel that they need to "get out and do more deals", too, though.
Since you seem unwilling or unable to objectively answer my question, this will be my last response to your dregg. Please feel free to continue to try to libel, slander and degrade me at your convenience.
Sincerely,
Roger Johnson
O.K. Roger......I agree only that it is time to put this to rest. Keep up the good work on the message boards.
Sean Flanagan
I would definitely not deal with someone who has bad credit and no down payment (deposit). The reason why is that once that person moves into your condo, he has no real motivation to pay. He could live in your condo for free for a few months and make your life miserable. Someone who puts down a decent deposit (5% minimum) has something to lose and is more likely to take the opportunity seriously. You are on the right track, but I would strongly deter you from dealing with buyers with no deposit and bad credit. That is a recipe for disaster.
Best of luck,
Sean Flanagan
Sean Flanagan,
Glad to meet you.
I am certainly no beginner nor am I confused.
Of the 500+ Subject To deals I have done not one was a Lease Option deal on the sell side. I found through experience of my own and hundreds of my students that Contract for Sale is the preferred method of selling if you want to receive the full dollar potential out of a Subject To deal.
The buyer is more apt to improve the property, feel the pride of ownership and actually re-finance within the time period of the Contract for Sale.
We have 3 profit centers built into the Subject To deal, the down payment which is considerably more than Lease Option option money, the increase in the monthy payment from increasing the interest rate for passive income and the backside which includes a two year appreciation on the property when the buyer finances the property.
Voice mail has proven that if you do not answer the phone the caller will call the next deal. The first thing I ask when a student calls me and say they are having trouble selling a property is "are you using voice mail".
If they are then I know immediately this is the problem. When a buyer calls me I ask them questions about their life style, or do they have children, then I point out all the benefits of buying that particular property and then set up the appointment to show the property and sell it.
I admitt I learn everyday, but I do it from the many phone calls and 5000 emails I answered personally over the past year from investors and students who need help, so this keeps me as a course writer on top of what is really happening everyday in the investing community.
I wonder how many emails and phone calls your Guru's answered from their students over the past year to help them keep up to date?
So, I would say Roger is right on tartget and if I were you I would use caution in who you refer to as a beginner. His answers were correct to help the beginner.
John $Cash$ Locke
John,
I agree with most of what you have said about subject to transactions. As I mentioned in a previous post, I did over 40 deals last year and have already done more that that this year. I have a large number of houses that I have sold on contract for deed. I strongly prefer to sell this way only when I take over payments on a deal that is far in arrears and/or has high payments. The reason is simple, the down payment is higher and it is easier to get a higher monthly payment and higher back end profit. I geared my whole investing model around this technique for a few years........almost exactly what you are teaching. However, in the past couple of years I have started selling on L/O's when I can. I have found this to be a very good mix. I still make an up front profit, though not as large, still get good cash flow and often times get the house back to repeat the process. Typically my back end profit turns out to be higher than when I have buyers from contract for deeds refinance.
As for your view on voicemail, I would definitely disagree. I have found that the top producers use voicemail to prescreen there prospects. I have been doing this for years and typically occupy my properties in approximately 7-10 days. I almost always get the terms I want because I am dealing with motivated buyers. It is rare that there are even negotiations. I see new investors all the time running around showing houses or spending time on the phone talking to unqualified prospects and/or tire kickers. Soon these "investors" give up, wondering why it did not work for them. The answer is simple....they are wasting there time talking to unqualified prospects and tire kickers!
Obviously, opinions vary. I know what works for me (and others)....and that is the voicemail system. Maybe your market is different, but I doubt it? Something is definitely different if you are having succes that way. Also, as for prospects moving on to the next deal, no way. I am in Orlando, Florida, which is a good size city and growing area. There are investors everywhere, but non of them offer no qualify terms. That may be the difference where I am. Are there other opportunities around the corner that are as god as yours? If yes, then it makes sense to spend time talking to everyone. But here, opportunities for no qualify move ins are very rare. As a matter of fact, I only know of a few people who actually offer this type of opportunity. In such a big town, that is not much competition. By the time these people have been turned down by several other investors (and often times treated like dirt), they are thrilled to find my kind of deal and jump on it.
Also, as for guru's answering emails....I do not know nor do I care. They are not my concern. I prefer to take the good and leave the bad from there courses. And as far as Roger goes, his advice may have been o.k. for beginners. The article I wrote probably would be better suited for seasoned investors than beginners. Whether he is a beginner or not, I do not know. However, I do know his initial post was quite confrontational. He got what he was looking for and I still feel the same way as I did earlier in regards to his experience level (and attitude). If you come across the way he did, you should expect to get a negative response. In hindsight, I wish I would have disregarded him instead of wating time on his comment.
Best of Luck,
Sean Flanagan
P.S.- I am curious as to how your 500+ deals are verifiable through county records, yet you advocate using a trust to take title? Since beneficial interest is never recorded, How are your deals verifiable? Not trying to be confrontational, just curious?
Sean Flanagan,
No where have you ever seen that I advocate using trusts, I leave that option up to the individual investor. My major concern for the investor is that the trust be state specific and not generic.
My reasoning is thus, any top attorney or bail bondsman can penatrate a trust. Even attorneys that write courses and recommend using trusts will tell you this. It is not a sure fire method to provide anonymity when someone is looking to find out what you own.
The reason I know this is because I own a Bail Bond Company and am licensed as a Bail Bondsman. Sometimes we have what we call a 'skip' this is a person who does not appear in court when they are required to.
Since we are responsible to pay the bail amount if we do not find them and surrender them to the court . This amount can be $500 or $500,000 so we pretty well know the proceedure to tract this person down anywhere should the need arise. So you can see why a trust would not stop me from finding someone should it show up in my tracking proceedure.
Most of my deals are in different corporate entities, so it is easy to verify what I have done and speaking of that by checking your profile I find no information, what state and city are you from that you have done so well?
John $Cash$ Locke
PS: Filling a property in 7-10 days with a renter doesn't seem to be to large of a problem in a strong rental market, which is why I asked where you are from.
I have a question. How do your potential buyers get into the houses to visualize where their furniture is going to go if you do not show them the property? You didn't mention using a Realtor, and I doubt you are foolish enough to leave the houses unlocked.
Also, there is a law in most states that says if someone lives inside a property and and has power turned on in their names, then they are a resident of that property. To me, allowing people into your houses unattended would allow them to exploit this law, as the power company rarely checks to see if you are legally able to turn it on. How do you deal with this danger?
Jon
In regards to leaving a vacant house unlocked, yes..I often do. To date it has not proven to be foolish. I do not deal in low end properties often. Typically the homes I deal in are in middle cl***** neighborhoods. If you leave the house open during the day and lock it up at night you should be o.k. Contrary to what Johne "cash" Locke and Roger believe, when a voice mail is used and you offer attractive terms, you will have a constant flow of people throughout the day viewing your homes. I usually have my properties occupied in under 7 days unless I cant offer attractive terms. If there is a high underlying payment or I have taken over a property that is to far in arrears it can take longer. Anyways, my point is that with the voicemail system the house has a constant flow of people walking through during the day.
With the exception of people pulling back wood on handymans or pulling back a little carpet that was already tearing, I have had no problems. I am not saying there is no risk in operating this way, but to date it has worked out with minimal problems.
As for someone coming in and turning on power and then having a legal right to live in the property for awhile...that is a new one to me. I know if I give them permission to spend the night in a property they have a legal right to stay, but not if they just take it upon themselves to move in without permission. I am no attorney, but I find that most states having a law allowing someone to go in a house and turn on power without permission and live there until evicted is hard to believe.
The best of luck to you. Here in Charlotte, my company has experienced this scenario twice in about 15 years. Not common, but still costly and frustrating. This last time, the Realtor gave this lady a key because she said she was interested, she moved in, turned on the utilities, and immediately called the police when we knocked on the door. After a one-hour civil discussion with the (embarrassed) police officers, we were escorted away from the property. She left two weeks later with $30,000 of furniture, while we were still battling it out with the police and attorneys. And, to put icing on the cake, she filed an aggravated assault charge.
This was not a lower cl***** property. Nice, $300,000 town home.
Anyway, I know this happens in North Carolina, South Carolina, and Georgia. Your state may be different
WOW...Isnt that absurd! Sometimes I wonder who is making some of these crazy laws we have!! I am in Florida (next in line from the states you mention). Like I said, I am unaware of this law, but it sounds like something I need to look into.
Best of Luck,
Sean Flanagan
In most of the Western States, I find that the police will not evict a gorilla if he is in possession. They want a court order. I mean he may be a true Squatter, newly moved in but the police are loath to interfer. So you make a judgement call. Boost him without benefit of clergy or obtain a court order and do it. Depends pretty much on what part of town you are in. I had a nice man and wife move into a newly vacated home in South Central. I showed up and he waved a M 16 and suggested I leave. I could have returned with a 3.5 Bazook but instead I filed a complaint with the police. Dangerous man with (thank god) a fully automatic weapon. They show'd up in full armour and on his surrender and their examination of the weapon they took him away. I moved in one of our exguerilla fighters from Guadamala,now a framer in training, and the problem was solved. He maintained occupancy during the period of fix up.We made one our our usual Land Contract deals with exploders every 12 months. He never could properly qualify for a new mortgage, I think his FICO score was a minus. But a good man with family, so we created a new PMTD first for him at a small increase in sale price and discounted it to a small insurance company, we kept the service contract as we give a "Full Recourse" on all such goodies.
Many ways to skin a cat. Ooops sorry my cat gave me a really dirty look. Cheers Lucius
John,
I quickly skimmed your articles last night and saw some talk of trusts. I just looked again and realized it amy have been building trust accounts in your subject to article. Anyways, I am in Central Florida...Orlando area to be more specific.
Sean Flanagan
Great story!! Again, it never ceases to amaze me when hearing stories about people like the M16 tenant taking advantage of the system. Glad to hear it had a happy ending!!
Best of Luck,
Sean Flanagan
I am a fairly new real estate investor. I am also a police officer. The last few comments interested me and I whish to comment on them. I am a police officer in Texas. I can not speek for other states. In Texas Police officers do NOT enforce civil Law. Police officers only enforce Criminal law. For that reason I can not evict someone from a property (civil process). I can file charges for trespassing. If you allow someone to "look" at your house they are not trespassing. If you tell them to leave yoru property then they are trespassing. Trespassing, in the presence of a police officer, is an arrestable offence. Now, when does this become a civil matter? If someone obtains residencie then they are not trespassing. Once residencie is obtained the person must be evicted from a property. If you allow someone to move into your house, or to stay with you for a week, or in rare cases even a day then that person has obtained residence. If someone has the utilities in their name and they are recieving mail at this address then they have estabilshed residency. So I would say the key is to not let anyone establish residency. If you check your property every day and no one is living there then they can not be a resident of that property. If somone is living there then choose your words wisly when you talk to the police. Tell then that the person is trespassing, that you allowed the person to enter the property for an hour or less for the purpose of evaluating whether they would purchase the property. The person is now refusing to leave and you have "notified them" that they need to vacate your property. Tell the police that you whish to notify the person of "criminal tresp*****" in their presence.
If the person has only been there a short time this should not be a problem, however, if you let them stay a week then you will be lookin at an eviction.
Justin