Help with L/O presentation to real estate agents - Posted by Kim Parlapiano

Real Estate Investing
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Posted by Matt B on August 01, 2001 at 22:10:09:

I’m not really sure how I’d change my letter to pitch a subject to deal. In fact, I might even just shorten it and change the description a bit to pitch a subject to. Lease options just seem to work so great for me that I have just chosen to specialize in them. I have done a few subject to deals, but my preference is lease options, at least for now.

If I can find the name associated with the listing, I will use that. If not, I address the letter to the “Property owner”.

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Help with L/O presentation to real estate agents - Posted by Kim Parlapiano

Posted by Kim Parlapiano on August 01, 2001 at 10:04:40:

Hi everyone,
My husband is a part-time agent and in the past he has called agents (representing me as a buyer) and pitched L/O’s. We have come across a lot of negativity and supposedly they have presented them to the sellers. I have located about 10 properties that are vacant and listed in the MLS. My question is, should I have my husband present the offers verbally or should I just handwrite my offer and fax it directly to the agent? Also, I am unclear as to the best way to approach the sellers. Should I let them know I plan on leasing the property to someone else and come off as experienced as if I do these all the time or should I not say anything and just try to lease it as potential Joe Buyer. I appreciate any advice or comments. Thanks.

Kim P.

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Forget agents/brokers - Posted by Jim FL

Posted by Jim FL on August 01, 2001 at 15:52:38:

Kim,
You are in luck because your husband has MLS access.
AS Matt said, making L/O offers on listed properties is often a waste of time.
This does not mean you cannot do it, and make some deals, it is just harder.
I’ve bought some homes using L/O’s thru RE agents and brokers.
Some were homes that were listed for quite some time, and the seller were about to pull the listings, so the agents sold to me this way, and agreed to take their commission when I exercised the option.
AS I told them, it was better to go with me, than to lose the listing all together.
Others I’ve bought thru agents using a L/O were where the agent was selling another home to the seller, and did not mind waiting for their commission on the sale, because they were getting paid to sell a home to the sellers.
But, these are rare occurences.
You are definitely better off looking at expired listings from the MLS and marketing to get sellers calling you.
In fact, I recently decided to give Matt’s letters a preliminary try.
I have had my own little “System” for a while now, and while it does not seem to vary from his too much, I thought a fresh approach could not hurt.
I took a letter that he posted here and inserted my contact info, and then e-mailed it to a bunch of homes for sale by owner from ads placed online.
This was two days ago.
I sent out about 100 of them, and just today I have 5 responses saying they liked what they read and would like to talk to me about my “program”.
I am meeting with two of the sellers tomorrow, and have left messages for the others on their voicemails.
We shall see what the outcome is, but I have confidence in Matt’s approach, because I KNOW it has worked for him.
Of course my “sales pitch” to the sellers about why they should choose me to L/O their home to will help, since I’ve already done a number of them.
But, the initial contact was brought on by his letter.
Try it, it may work for you.
Heck, the cost is low enough to mail a bunch of them out, so the risk is low for your cash.
I’ve also noticed something else lately.
I just moved to Florida, and I have learned there are a ton of homes here owned by people from out of state, and many are for sale, and have been for quite some time, sitting vacant many times.
Surely my L/O offer could “Stop the bleeding” for these sellers, so we are sending out mailers to many of them as we speak.
Bottom line is, get your information in front of as many sellers as you can, and some of them will respond.

Meaning DEALS will follow.

HTH,
Jim FL

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Re: Help with L/O presentation - Posted by Matt B

Posted by Matt B on August 01, 2001 at 12:07:57:

Really, trying to do lease options on listed properties is going to be a big waste of time. You have to convince 2 parties- the seller and the agent, that it is a good deal. The agent is going to have to be agreeable to waiting for their commission or working out something with the seller.

Most agents will kill the deal any way because they do not understand a lease option, or they want to be in control of it. This means that they will want you to use their paperwork, have you put down a decent down payment, and they will control how it is structured.

Do yourself a favor and forget about listed properties. However, since your husband has MLS access, you can pull EXPIRED listings and mail them this letter if you’d like-

Dear property owner,

I recently noticed that the listing you had for your house that you are trying to sell has expired. I would like to discuss with you the possibility of purchasing your house. I am an investor who buys homes to resell for a profit. If your house qualifies, even if you have very little or no equity, I would be able to offer you a deal where I would take over the payments on the house, guarantee all maintenance and repairs, pay the taxes and insurance and eventually buy the house from you.

If we can come to some agreement, I am able to move fast to relieve you of the payments on the house. I am not a real estate agent and am not affiliated with any real estate agency. I do not want to re-list your property. I am a private investor who buys houses and resells them for a profit.

I can offer you a FAST solution to the problem of a slow-selling house. In many cases, I am able to offer you close to the appraised value of the house. If you are willing to consider a lease option, I can move fast to take over the payments on your house, take care of repairs, maintenance, insurance, or any other expenses related to the house.

If we were to sign a lease option agreement, I will put a tenant/buyer in the property. This is someone who has been put through an intensive screening process by my company to make sure that they are able to actually buy the property at some point in the near future. I then work closely with this tenant/buyer to help them get qualified for a mortgage. It is in my best interest to deal only with quality tenant/buyers, because I make my money by actually selling the property, not by renting it out long term or charging you any fees.

The best part of this is that there is NO COST to you as the homeowner for this! As I mentioned, I make my money by actually buying the house from you and selling it to my tenant/buyer. I manage the property, take care of maintenance and repairs, make your payments, AND actually buy the house in the near future!

We do not want to deal with people who are only looking to rent and will not take care of the property. We deal only with people who want to become homeowners and do their best to maintain the property while they occupy it. Our tenant/buyers are put through an intensive screening process to qualify them for the houses that we buy and sell.

Even if our tenant/buyers do damage the house in any way, we guarantee in writing that we will repair any damages and bring the house back to the same, if not better condition than it was originally. We continue to make the payments on the house and replace the tenant/buyer with someone who is more qualified to actually purchase the property from us.

It is in our best interest to deal with only qualified, high quality tenant/buyers, because as I said, we make our money by selling the house, not by charging you fees. While we help our tenant/buyers get qualified for financing, we still maintain the property and pay all expenses related to the house so that you never have to bother with anything related to the house again. That is, until we call you up and tell you that it is time to come to a closing and collect your check.

We can offer you all this even if you have very little or no equity. Even if you have had trouble selling the property in the past, we can help. Remember, we don?t charge you any fees or commissions.

Give us a call today!

Sincerely,

Any way, good luck and let us know how it goes.

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Tell the Truth… - Posted by J. Clifton

Posted by J. Clifton on August 01, 2001 at 11:03:59:

…pay attention, show up, and be indifferent to the outcome, if you’ve done the other 3. Be honest and say you buy property to fix up or lease out; upfront disclosure is much better than back end explaining, especially if the owner is screaming “you didn’t tell me!” later on. HOW you say that is another matter. Use some of the prospecting and negotiation approaches (like Joe Kaiser’s) explained in the CREO articles section to phrase your offer. As the experience of your agent spouse indicates, it’s not that other agents have a hard time understanding lease options, but that they have a hard time LIKING them, since they don’t get paid the normal way. Have him offer one or two month’s rent as a commission, or what ever is the standard fee they get for apartment listings in your area.

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Re: Help with L/O presentation - Posted by Steve-TX

Posted by Steve-TX on August 01, 2001 at 21:05:13:

Thanks for the text to your letter. You are very giving with your ideas and marketing in particular in your posts–very appreciated.

I’m trying to start my business using the Subject To technique rather than Lease Option when buying, both which seem very similar except for the “get the deed” aspect. (I do intend to sell on Lease Option, however.)

Along those lines, how would you change your letter to homeowners of expired listings to reflect the “subject to” concept rather than lease optioning their property?

(Also, do you look up their name after getting the expireds off of the MLS, or just send the letter to “Homeowner”?)

Thanks in advance.

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Re: Help with L/O presentation - Posted by Kim P.

Posted by Kim P. on August 01, 2001 at 19:17:17:

I agree with both you and Jim. I will concentrate on the expired listings and send out letters. We have heard so many negative comments from other agents. My favorite is, “I’ve heard about people like you trying to do that creative real estate stuff” They make it almost sound dirty… Thanks again.

Kim P. (CT)