Posted by Scott OKC on May 17, 2002 at 09:49:30:
Mike-
Thanks much your input. Sounds like I would be giving away the store on the deal we had discussed. I’ll check the archives.
Scott
Anyone doing L/O for other Investors? - Posted by Scott OKC
Posted by Scott OKC on May 15, 2002 at 21:49:43:
I’ve been having great success doing L/O on my own properties. Another investor has asked me to do the same thing for some of his properties. I have not been trying to promote this as a service, but it seems like a way to pocket some extra income. My inventory is low right now, so I took him up on it. We are moving toward the following deal:
*He commits the properties to me for a minimum of 30 days.
*I get 25% of the option deposit, minimum $600. I shoot for 3%-5% option deposit.
*The deal I offer to the T/B includes back up owner financing. If they go for the owner financing, I get 3.5 loan origination points. If they cash him out, I get 3% of the sales price.
I am not a licensed realtor. It doesn’t look to me like I’ve got an equitable interest in the property doing it this way. Can anyone see how I can avoid the realtor issue here? Also, can you see how to structure the deal better?
Re: Anyone doing L/O for other Investors? - Posted by Mike Daly (GA)
Posted by Mike Daly (GA) on May 17, 2002 at 07:03:03:
Basically what you’re doing is a lease option assignment. The way to do it is first to get a signed lease option agreement with the investor. However, your lease payments don’t begin for 2 months, and if you haven’t found a buyer by then you can cancel the lease. Then once you find a buyer, you assign your lease option agreement to your buyer.
There is more to it than that, so search the archives for “L/O assignment” and you should the info you need.
I would get the entire deposit as your assignment fee, rather than 3% of the sales price if they cash out. If you only get 25%, I’d say you’d just be breaking even once you factor in the money and time you spend on marketing and qualifying your buyers. Chances are, the buyer you find WON’T cash him out so you won’t see that 3% very often.
I do like your owner financing idea. However, I don’t think you can legally get loan origination points as a third party unless you’re a licensed mortgage broker. I would check it out though.