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Assigning Lease Options Back to the Seller
January 16th, 2012
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Number of View :38
UPDATED TOWARDS BOTTOM
Question:
Good Morning Adam:
I have a quick question. I’m going to re-read the Cooperative system again but from what I remember you mainly taught assigning LOs to tenant buyers. Recently, in the free report you added to the site, you mention assigning the deal back to the seller, which I like better! However, I’m wondering how that is truly done.
I’ve talked to many investors that say they don’t understand how that’s the proper process. I lock up the deal with an option to lease option, then sign the lease with TB with me as the Landlord (along with an option to purchase), then assign the lease and new option back to the seller. Does the lease agreement and new option state that they are assignable? That’s the missing link for me. The argument that I’m hearing is you haven’t truly exercised your initial option with the owner of the property by doing it this way, unless the option states you may exercise it by producing a signed lease agreement and new option etc.
I’m not seeing how the original contracts with your program allow for the assignment back the seller. I’m probably over thinking it a bit but I feel like something is missing and may people I’ve spoken with agree.
Thanks in advance!
Answer:
Yes, you’re over thinking it. That free ebook actually gives you almost everything you need. If you go through the CP manual you’ll see the connection.
Most investors don’t go this route because they only want to get themselves in and out and don’t care what the tenant/buyer knows they made. Experience taught me that you can’t sign contracts for others or give legal advice. So, when you assign to the seller, you’re actually structuring the entire acquisition. The only thing left after that is the seller and tenant/buyer going into contract together after you’re gone. Which, is easy if they have the original agreements plus blank sample ones.
And no, the tenant/buyer’s contracts (option and rental agreement) are non-assignable, and pro-seller. So if you optioned it, became the landlord, then the tenant/buyer would get the pro-seller agreements. This way when it’s assigned back to the seller, they have the proper paperwork.
If this process seems to hard for you, keep things simple. Be a consultant for the seller on lease option deals, or simply assign to the tenant/buyer.
Hope that helps,
Adam
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UPDATE
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Reply:
Thanks Adam! I’ve also thought of just assigning my option to the TB for the fee and letting them enter into lease w/option on their own, as I believe you’ve mentioned in the past. My only concern doing it the “simple” way is how the TB could get credit for the assignment fee towards their purchase. Could I just use the assignment addendum to ensure they get the “credit”?
I know that’s not exactly what it’s for but I thought that might work this way as well.
Answer:
Yes, I always make sure my assignment (their consideration) is applied towards the purchase price. If you look at the assignment agreement, that’s how I have it worded. When the seller acknowledges it in writing then they’re now bound to the application of the consideration/assignment.
So in short, yes.
Hope that helps,
Adam
Categories: Questions and Answers
Calling For Rent by Owner and Contract Copies
December 26th, 2011
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Number of View :40
QUESTION
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i read through the whole manual this weekend. i am starting to get it. going to read it again. still in the woods a bit.
i am going to call rental ads in my paper, feel em out to see if they will do a rent to own, go from there. any script ideas on that? one more thing. do you take carbon copies of the contract to meet with the seller so both have copies?
i thank you for letting me ask questions.
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ANSWER
Talking with people is a personal process, you’ll learn what works for you and what doesn’t. My only advice is to get to the point quickly and remember that you’re a buyer, not a seller until you have the property under contract etc. And, use the five questions to success manual for your initial calls. This keeps you on track and always in the driver’s seat with questions of proposition.
As for copies, I always have at least a few sets of blank contracts with me at all times. So yes, I try to have a copy and if not, I get them theirs as quickly as possible.
Adam
Rental Application and Home Warranty
December 15th, 2011
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Number of View :36
QUESTION:
Adam,
Did you make sure the homeowners went through the rental application process prior to signing a tenant buyer or just make it their responsibility after the fact? I’ve also heard other people say to provide or make sure a home warranty is included in the deal. Thoughts?
I’m re-listening to your bootcamp recordings! Thanks again for all the information and your candor.
ANSWER:
In most cases I had the tenant/buyer go through an actual mortgage application with my loan officers. We knew they wouldn’t be approved now, but this way the LO could help them forecast what they needed to do in order to get a loan. If not, yes. I had them go through a rental application and would pull their credit either myself, or again with an loan officer. Whichever was legal to do without infringing on their rights.
And yes, I ALWAYS asked the seller and tenant/buyer to have a home warranty. This way the seller had less “landlord” duties regarding the plumbing, electrical and major appliances.
Hopefully that sheds some light.
Adam
Cooperative Purchase Elite Now Open!
December 1st, 2011
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Number of View :40
The Cooperative Purchase Elite Joint Venture and Real Estate Building System is now available!
The 30 Minute Real Estate Empire for Leaders Only
November 28th, 2011
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Number of View :115
“You Only Succeed by Leveraging the Self-Interest of Others. BUT, There’s a HUGE Catch”
This Tuesday, I am going to show you what I did to get my very first deal, how I arrived at 40+ deals at the end of that year, and how I leveraged myself in order to build a national network of over 120 investors that did most of the work for me. All within 18 months from that first deal.
I’m going to show you how I obtained partners IN ONE DAY who had millions of dollars at their disposal.
I am going to show you how I beat my analysis paralysis and anxiety attacks in order to do what I was too afraid of doing, or simply couldn’t do.
And, more importantly, I am going to do all of this on one phone call as I share with you my greatest secret of success that NO ONE was using, and STILL isn’t using!
This is your chance, make 30 minutes for yourself and your family, or assume this isn’t your answer and miss this opportunity forever.
Title: The 30 Minute Real Estate Empire for Leaders
Time: Tuesday, November 29th at 9:00pm Eastern
Listening method: Phone + Web Simulcast
To attend, visit:
http://InstantTeleseminar.com/?eventID=24542814
Phone Number: (248) 464-6062
Pin Code: 732886#
Pin Code: 732886#
See you Tuesday!
Adam
PS If you don’t know me by now, that’s okay. But know this, you don’t get ahead in life by trying to get ahead in life. You get ahead by caring for more than just yourself. With that said, this call isn’t just for you, it’s for those you love, and the people you will meet, build relationships with, and profit with and from, along the way. I am not looking for followers trying to better only themselves. These are the losers and I will prove it on the call. This is a leadership call, and I expect only leaders to be on it. Let’s do this Tuesday and never look back.
Adam
PS If you don’t know me by now, that’s okay. But know this, you don’t get ahead in life by trying to get ahead in life. You get ahead by caring for more than just yourself. With that said, this call isn’t just for you, it’s for those you love, and the people you will meet, build relationships with, and profit with and from, along the way. I am not looking for followers trying to better only themselves. These are the losers and I will prove it on the call. This is a leadership call, and I expect only leaders to be on it. Let’s do this Tuesday and never look back.
Do I need a license to buy and sell real estate? Revisited…
November 14th, 2011
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Number of View :133
QUESTION
I am ready to make a strong push for the CP concept.
I was told that in NJ I cannot get an option on a property and assign this to someone else if I am not a realtor (or take an option contingent upon finding someone to sublease if I am not a realtor).
Do you know if this is accurate or if I need to find a workaround?
Thank you again.
ANSWER
Each state has their own regulation about being licensed. Since I’m not an attorney, nor one in your state, I would talk with an attorney. However, in my opinion, when someone says “you need a license” I say, “show me the laws”.
The reason is that this is a very grey area and one I’ve dealt with my entire career as an investor. Again, in my opinion, coming from a strict state like MI, I would say talk with an attorney because most of the time you DO NOT need a license if you’re a principal in the transaction. Again, talk with an attorney like PPL (legal shield “Link to the right”) and get the facts straight. You may find out that all you need is to hire a broker at most.
Hope that helps,
Adam
Negotiation and Deal Structure Call Sunday Nov 20th 7PM EST
November 9th, 2011
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Number of View :403
THIS IS THE RESCHEDULED CALL!
Every day I get questions about how to put deals together, what contracts go where, what do you say when, how, why, etc. But almost no one ever asks me the most important question in order to gain success the quickest, easiest and most enjoyable route possible.
And that question of course, is; “What is your perspective as an investor?”
Next week, I will be opening up the doors to a very special call discussing negotiation and deal structure from a VERY different angle. This will be the VERY FIRST TIME EVER that I will be showing you how to become the very best investor, father, mother, brother, sister, etc that you can be.
In short, I am going to show you how I do real estate from the angle of “Tessera”.
If you don’t know about Tessera by now, you haven’t been following me. Which, is perfectly okay since I’ve been kind of “hiding it from you”. Why am I hiding my life’s work from you? Because you are my real estate investing audience and you’re not the same audience as Tessera. But, I think it’s time you saw what Tessera has done for me and what it can do for you.
So, this Sunday at 7PM Eastern, I will be having the first ever Tessera for Real Estate Investing lecture call. This will be a call like you’re never seen or heard before. That, I can assure you.
You have nothing to lose, and a life time of fulfillment to gain.
Here’s the call details.
Adam
Closing Lease Option Assignments
October 27th, 2011
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Number of View :99
QUESTION
Do you use an attorney, a title company, mobile notary, or where, or how do you (personally)
close the paper work?
ANSWER
Referring to lease option assignments, I never used anyone to close the deals. I did them all myself.
I only used an attorney to go over the entire process.
Nothing needed to be notarized, unless it was a land contract etc.
I’ve closed them in kitchens, cars, McDonalds, picnic tables etc.
Adam
What to Say to Mortgage Brokers While Doing Cooperative Lease Options/Lease Option Assignments
October 15th, 2011
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Number of View :144
QUESTION
Hey there Adam.
Hey there Adam.
Concerning the Cooperative Purchase System, thanks for making a great product that really spells out a simple and practical way to get started making money in todays real estate market. I’m in the Seattle area and would liken this market to tough, higher price markets like Los Angeles, New York, and South Florida.
Even so, I am most excited to let you know that I have an appointment to meet with a seller next week. I will let you know how it goes.
I just wanted to ask how you would recommend going about finding a good mortgage broker to work with your Lease Option buyers. I know you mentioned that when you got up and running you actually had your mortgage broker take all your incoming calls and screen the Lease Option buyers you were bringing in as a result of your marketing. I would like to get up to that level too eventually but I know that I need to start out somewhere.
So please, if you have the time, what do you suggest I do to find a good mortgage broker to work with my Lease Option buyers and get them qualified.
Thank you so much for your time and efforts on both the “Frustrated Investor” and “Cooperative Purchase” resources.
ANSWER
Thanks for the compliments.
First off, you have to remember, many mortgage brokers are hurting just as bad as investors, if not worse. This means they’re looking for any buyer that they can find. In short, they’re looking to help people “become buyers” just like you are with lease options. This is where I would start.
Let them know you have a program that can put credit challenged buyers into a property, fix their credit over time, and then get a mortgage. In fact, I receive a lot of my buyer leads “from” mortgage brokers. They LOVE telling people that they had to turn down that they could help them get into a property.
So, just look at it from their perspective and you’ll know exactly what to say.
And finally, I did have some of them take the calls. Yellow coraplast signs, black sharpie “Rent to Own” and their phone number. They would qualify them before they even saw the inside of the house.
This is a great partnership.
Finding the right one is as simple as picking up the phone and having a conversation about them and what they can offer.
Finding the right one is as simple as picking up the phone and having a conversation about them and what they can offer.
Hope that helps,
Adam
Closing a Cooperative Lease Option, or Lease Option Assignment
October 6th, 2011
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Number of View :137
Question
Hi! I’m having a little problem understanding the Co-op Lease Option. If I’m doing it by myself and not using a realtor can I close the deal by myself or do I need to take it to a title company to do the lease for me to revuiew the lease and collect the down payment or do I need to take it to a attorney to revuiew the leases to make legal so I can collect the down payment. The reason I’m asking cause I’m Wholesaler and I’m doing assignments and I close all my assignments at a title companyto make it legal. I need some help on this do you use and attorney to revuiew your your leases before you have them sign the leases or can you just do the closing infront of the seller and the tenent buyer and collect the down . Please reply
Answer
Just because you’re not using a title company doesn’t make them any less legal. Your assigning an agreement, not conveying, or transfering title. There’s no bank involved, and there’s no loans involved. Why waste the money on a title company?Answer
As for an attorney looking over the agreements and possibly helping you with closing, absolutely. Make sure you’re doing everything right and keeping everyone (including you) out of harms way.
I’ve closed them on picnic tables, kitchen tables, at McDonald’s and even the hood of a car.
Keep thing simple.
Adam
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