The real estate investing world is about to go through some profound changes. Part of this has to do with the serious impact our economy is now going through but the stage was already set before the economy was suddenly spun onto its head. The affordability issue for home buyers that has been growing for years will now be compounded by our new economic reality. What may surprise you is how all of this further demonstrates the versatility that real estate investing provides.
The new economy is opening more scenarios for lease option investors!
Changes will not happen instantly. However, a new foundation is emerging that alters some fundamentals of how to find rent to own properties. Today is when you need the resourcefulness to place proven building blocks upon this new foundation that will shape your financial future.
More Rent to Own Properties Will Become Available
Obviously, the stock market crash and coming unemployment are going to have a profound impact on the entire economy. People are once again realizing how risky the stock markets are and how easily Wall Street investments are wiped off the digital map. As more and more of the remaining money seeks the safer investment of real estate, it will open tremendous possibilities for cooperative lease options. I’ll share more about that in future posts but right now, I want to get down to important basics about how to find rent to own properties in this emerging market.
Something that will not change are the three types of sellers that you will always find in the market:
- Sellers who are upside down.
- Sellers who are break even.
- Sellers who have equity in their home.
Because of rapid appreciation in house values and other economic trends, the past several years have favored finding lease option houses from people that have equity in their houses. These will certainly remain exciting prospects going forward but new vistas are also opening. Our new reality is that the markets for break even equity sellers and even upside down mortgages will soon be emerging. Fortunately, I’ve been a real estate investor long enough to know how to find rent to own properties in all of these markets.
New real estate markets are opening up!
How to Find Rent to Own Properties When Sellers Are Upside Down
Historically the phrase “upside down” has implied that an owner owes more on the mortgage than the house is worth. These have always been difficult (but not impossible) cases for lease option investors to find win-win-win solutions. But if you think about situations where owners are at risk of falling behind on their payments or have already missed a payment or two, you (as an investor) can bring win-win-win solutions to the table. These don’t always feel like win-win-win solutions because the circ*mstances are often dire but the win for the owner is getting them out of an unsustainable financial situation.
Both lease options and “get the deed subject to existing financing” bring strong solutions when you work with these people early in the process. To start with, the lease option fee can be enough for the owner to bring the mortgage current so that everyone in the deal starts on a level playing field. Get the deed works similarly because you are getting the seller out of an untenable situation. The main difference is that you take ownership of the house with get the deed subject to existing financing, whereas lease options are about control without taking ownership. Still, the ownership position with get the deed is a low risk ownership position.
As full disclosure, these deals are more difficult to put together. But that is the new economic reality we are soon going to be in. The biggest difficulty is usually that the owners have to move out of the house they are living in. As unfortunate as that is, it reinforces how strong the rental market will remain. A strong rental market always presents new possibilities for cooperative lease options that are sold wholesale to landlord investors looking for much more secure investments than what Wall Street can ever offer. Many possibilities for sandwich lease options will also be emerging from this part of the changing real estate market.
What’s important now is that you have the tools you need as the basic market fundamentals change.
Sellers Who Are Break Even
Something you want to think about with sellers in this position is helping them get out from under their house when they can’t afford to pay a Realtor commission. Lease options, get the deed, and cooperative lease options are all useful tools so the seller can get top-market-value for their home without having to pay any Realtor commissions. What these sellers are ultimately looking for is the ability to walk away from the house with a clean slate – no damage to their credit and in a relatively good financial position. This won’t happen to all owners but a new market will emerge.
How to find rent to own properties involving break even sellers often means recent purchases. Recent being within the past year or two. People who might have bought at the higher end of the market analysis and haven’t seen the value appreciate enough to get them beyond the break even point. These are higher risk houses that you want to be very cautious about getting involved with. But there are possibilities using the techniques that I’ve had in my toolbox for decades.
If any of this interests you, now is the time to put the tools in place. You need proven contract templates and checklists that make sure all of the right steps are completed. None of it is difficult when you follow the simple instructions and know when to ask questions.
Is it all “doom and gloom” in the market? Heck NO! I live in Detroit and the deals are everywhere. You just have to know how to find them. Learning when to apply each type of option strategy is the key.
If you are ready to step up to these new challenges with sandwich lease options and these other proven methods, you can begin closing deals in the next 30 days. All you need are the right courses, information, templates, and contracts.
- Learn the basics: Investing In Real Estate With Lease Options.
- Next are the details: Buying and Selling with Lease Options.
- Create your Wealth Building Arsenal.
- Personalized Coaching.
We’re entering a time when unique solutions will be more appropriate. Fortunately, the right tools for these situations are already available:
- Cooperative Lease Options.
- Get the Deed “Subject To.”
- Working with Realtors.
Taking action today will have you ready for what tomorrow brings. Low cost and low risk real estate investing works every time. I can’t wait to hear about your first deal!
By Wendy Patton
For more than 35 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
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