Posted by Steve Heller on November 14, 2000 at 07:16:02:
I would explain all the benefits of L/O to him up front. So he has time to think about it I would not bring up the rent credits until after he had agreed to L/O, even if then.
Steve
Converting from rental to L/O? - Posted by HT
Posted by HT on November 14, 2000 at 07:02:37:
How should I approach current owner to convert property from a rental to selling to me on an L/O?
Here’s the scenario:
I have been renting (I know,why rent when you can own:-)a beautiful home in an area where properties move pretty quick.
My current lease is ending soon and I will be purchasing or L/O a new home, however, I would like to acquire my present home as an investment prop to L/O or resell.
The current owner has the property run by a management company and I know it was vacant for a few months prior to my moving in here.
I believe he had bad tenants previously and didn’t want to pay the cost of having the place cleaned and painted, so it sat for a little while. This shows me signs of someone who doesn’t want to be a landlord, just wants to receive monthly checks.
My thought was to contact him directly and make an offer for a long-term L/O (5 years) with an option to buy. I’m just not certain what to put in the letter.
Should I place any of the following:
- Describe the benefits of L/O
- Explain how more money would be made cutting out the management company and dealing directly with me
- Remind him that I am the current tenant and my excellent payment history.
Also, if he agrees, is there anyway to get some of my previous rents applied as rent credit.
Sorry for the length, but I wanted to provide the essential details.
Thanks in advance for all feedback.
HT
Re: Converting from rental to L/O? - Posted by DavidV
Posted by DavidV on November 14, 2000 at 14:46:43:
I agree with Brian, i would just pick up the phone and see if he is interested. One thing you might want to check on is if the property management co. gets a cut if the property is sold. Some put in a clause where they get a percent of the sale if the property is sold to a tenant they found, even if its up to a year after the contract is over. It wouldn’t affect your end, it would be his part to pay, but it may cause some unwanted hoops to jump if he hasn’t read the fine print. Yes there was a story behind that. Good Luck.
David
Re: Converting from rental to L/O? - Posted by B.L.Renfrow
Posted by B.L.Renfrow on November 14, 2000 at 12:10:35:
I wouldn’t send a letter. I’d pick up the phone and call the guy. Just ask whether he might be interested in selling the property at some point.
That way, you can find out immediately what his needs are, and answer any concerns he might express. Letters are OK for mass marketing, but in this case, I think you’d be better off to phone him, or if he lives nearby, go see him, which would be even better.
Brian (NY)
Re: Converting from rental to L/O? - Posted by JohnBoy
Posted by JohnBoy on November 14, 2000 at 07:54:35:
I would just tell him that I would be interested in signing a LONG term lease if he would consider giving you the option to buy the property. You have already established a history with him paying rent. The idea of having you willing to sign a 5 year lease to STAY might be enough incentive to give you the option of buying the property later. If that gets his attention then all you need to do is get him to agree to a price based on TODAY’S market value vs. him wanting to wait until you’re ready to exercise the option later and have the property appraised at that time to determine market value. I wouldn’t get into any details on how a L/O is to his advantage right now since you have already been renting from him. Just tell him you would be willing to sign a new long term lease IF he would agree to giving you an option to buy the property, otherwise you will have to find another place and will be leaving when the lease is up! If he’s been happy with you so far, he may not want to lose you as a tenant and agree to it just to keep you. If that gets his attention, THEN work on the details as far as price and rent credits go. If you throw to much at him at once you may scare him off from considering the idea.