Hi Adam,
Thanks for your response. The owner has been living this house since 1999 (purchased at 148K). He has been regular on payments and has had good rate of interest. To me, he looks like someone who has equity, wants to sell this property and make some money, not desperate (willing to wait to make more money with lease option purchase), doesn’t want to pay realtor commissions. I may be able to make more money if I do lease option to purchase and not coop lease option because he has equity but I just want to coop lease options in the beginning.
The 2 mistakes I did while speaking with owner when I visited his property were:

-    I did not ask about his monthly payment on mortgage + tax + insurance
-    I did not show samples docs and draw a picture

I will call him tomorrow to make an offer. My final offer will be 190K + 5K (my assignment fee) for 2 years. The city assessment for 2011 was 193K and for 2012 it is 179K (pretty sharp drop in city assessment). Many end buyers look at city assessment while buying a house.

Is it hard to find tenant buyer for a 3 or 4 years lease option?? I have heard people say this.

ANSWER

(Not if you justify the rent.  I have had people qualified do a lease option because the rent payment was lower than their forecasted interest rate.  They took the time to rent “one year” and built up their credit.  They then cashed out with a lower interest rate therefore lower their payment again.)

From the zip file with all documents in your course package, I believe the documents that I need for cooperative lease option are:

1.    OPTION TO PURCHASE REAL ESTATE TENANT BUYER

2.    ASSIGNMENT AGREEMENT STRAIGHT OPTION

3.    Assignment Addendum LEASE OPTION

Please let me know if I have the correct list.

ANSWER
(Look at the flowcharts from both ebooks. The manual and the free ebook on the frustrated investor site.  If you are assigning to the tenant/buyer it’s “pro seller option and rental agreement” and assignment agreement.  The assignment addendum may not be necessary as the tenant/buyer is buying the contract.  But, a letter of assignment is just one more vehicle to cover your bases so everyone knows what’s going on.  And remember, you’re not assigning your straight option, you’re assigning the pro seller option and rental agreements)

On page 63 of your full manual, you have a flow diagram of “Lease Purchase Assignment”, in step 3, you have mentioned a document called “Rental Agreement You as the Tenant Buyer”. What is the file name for this document??

ANSWER
(It’s the pro seller rental agreement.  The one you assign to the tenant/buyer that allows them to step into your place)

I will also request a right to extend the option for 1 year. Do you already have this clause in your lease document?? 

ANSWER
(No, it’s something you and your attorney would need to put in)

THanks

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Yes, I think the house has enough equity but I will verify tomorrow. If there are no rent credits, why would a tenant buyer even buy a house considering the declining house values? In the example that you for lease option assignment in page 63 of your Full Manual, I noticed that your example does not mention the rent credit. 

ANSWER
(You must consider the possibility of equity being gained through the principle payment.  Everything is negotiable even in a down market.  If the house declines, the tenant/buyer may want the seller to adjust the purchase price.  And, if the tenant/buyer just got done paying for 2-5 years rent, that payment may have given the seller wiggle room because of the principle being paid down.  Remember, it’s about saving money on the payment so the tenant/buyer can put more down later if they want to.  Everyone is tied to the emotion of “how much now”, use that towards your advantage.  The credit card companies have and they’re winning…)

Hi Adam,

Thanks for your response.

Yesterday, I called 9 FSBO ads in Madison, WI. One of them might consider Lease Option so he asked me to visit his property. His list price is 217K since he paid that much when he bought it a few years back but Zillow.com shows 184K as market value; City assessment is $193K. This house was build in 1964. I am thinking of asking him to consider 185K but the highest I would go is 205K including my fee of $5K for a 2-year option. Would this be reasonable??

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Answer
(First off, I would NOT trust Zillow!!! I would have at the very least, have an agent to a market analysis so you can see what’s sold and what the average property is listed for. Remember, a property is only worth what a bank will finance if for.  So, your price may be right, but that’s ONLY for you to decide once you get better data.  Also, because of the economy, I’d shoot for no less than a 2 year lease.  This way the rent payments can knock some of the mortgage balance down giving the seller some wiggle room on price.)

In another scenario, the home owner has been trying to sell their home for sale since 2009 through various realtors. The Current FSBO  listing is 6 months old. The property is listed at 224k (zillow – 213K; city assessment – 243K). The lady said her husband commutes more than 1 hour to work so they want to move closer to work. I thought she would be very motivated to lease options but she said she wants to be done with the house once it is sold. I am thinking calling back after few weeks. Do you have any suggestions on how to approach this property? 

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Answer (At first sight they seem motivated, but they must know what market we’re in.  If she wants it gone for good she’s going to have to take a beating on price.  Remember, that’s what a LO is all about, it’s for motivated people who cannot sell or don’t have the equity for a quick sale.  And yes, I would get back with her and mention these two scenarios.  Could be worth it to take an option for cash and lease (Section H. on the Cooperative Option agreement) higher and agent and get it listed for those two terms.  If it sells cash, release your option to the seller for a fee.  If it sells on terms, assign your interest.  And, as always make sure you talk with an attorney to make sure you fulfill these two scenarios properly according to your state.)

Please respond and let me know.

Thanks

Question:
I have a question about the cooperative purchase course.  How are we able to offer this service to a homeowner in the Sate of Florida and/or also Ohio without a real estate license?  Will your program show me anything different than a lease purchase with option that will be assigned?  If there is a twist in this and it is legal, I’m in. Thanks.

Answers: Part One
First off, if I have a nickel for every time someone asked me about the “brokering without a license” question, I’d be retired.  Second, you’re using the wrong word right from the get go.  ”service”

Question:
Hi Adam,
I’m a brand new investor here in CA and I haven’t done a single deal yet. A lot of thinking/talking and not much doing:) Well, I’m ready and eager to start my investing career and would like to start with Cooperative Lease Options/Assignments. I’ve heard great things about your course on the Bigger Pockets and Flipping Homes forums. Before I make the purchase I have a couple questions…Does this program and it’s concepts work in California and is everything I need to structure these types of deals in California in this course?

Please let this newbie know either way.

Thanks and keep up the great work!

Answer:

QUESTION

QUESTION:

Adam,

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

QUESTION