FINALLY

FINALLY

Did what Dean and most every other investor told me to do, Flap my lips!

OK, so I am putting some money into an option to purchase and I am sharing equity at sale and yes I'll also be putting in some repairs, I already have a tenant generating $200 per month more than the LTO monthly payment.

The estimated FMV by the City is $48K. Mine comes out at about $42k.

Regards to all,

FANBOT

Here's the deal:

Good evening John,

A brief email to confirm the major points of our negotiation this afternoon:

Fixed Sale price of $22,000 (twenty two thousand dollars) valid for a term of 2 years.
A Lease to Own contract as of 01/02/2010 through 01/31/2012 for which a rental of $390 to be paid to Bank of America monthly starting on 02/1/2010. (Could you provide me with the account#?) This payment will be terminated at the moment of Title transfer on consummation of the Option to Purchase or in the event that the building is destroyed making the Lease to Own contract unenforceable.
Lease to Own and Option to Purchase contract to be provided for your approval.
$2,000 cash on 01/02/2010 as non refundable option premium for the Option to Purchase portion valid from 02/01/2010 through 01/01/2012)
Repairs (maximim $4k) to be undertaken to return property to a habitable and rentable condition.
At execution of the Option to Purchase, that the closing costs to be borne by me.

We also negotiated the following equity condition in the event that I should sell the property to a third party within two years of closing on these contracts.:
50% (fifty percent) of the profits after deduction of acqusition costs and costs for rehabilitation and maintenance (proof of these to be supplied) shall be retuned to you.

I'll be preparing the contracts and should hopefully have these completed by Thursday.

In the interim period I would like to have access to the property to evaluate the repairs required. Although you mentioned that I could have access to the property, I would appreciate it if you could confirm this by return email. This will help me avoid situations where the neighbors may consider this to be an illegal entry and call law enforcement.

Best regards,

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


Congrats

This is very interesting and creative. Keep us posted on how it all turns out. I've never thought of using an option quite this way!

__________________

Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com

I can do all things through Christ who strengthens me. Phil 4:13

Psalm 1:1-3


FINALLY

Thank you for the congratulations.

I will post the email sent to and received from the seller to show the chain of events.

Fanie, everything looks good. You have my permision to have access to the property(.....8 Mt ....... St.) John D.......
- Show quoted text -

Best regards,

Fanbot

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


FINALLY

Well contracts drawn up, based on Lease to Purchase Option , Lease to Own Agreement and Contract for Sale and Purchase.

The verbiage was adjusted to accommodate the agreements made with the Seller. These have been sent to the Seller for his perusal and approval. The Lease to Purchase Option refers to the Lease to Own Agreement (& vice versa) and the The Contract for for Sale and Purchase refers to the Lease Option to Purchase.
These documents incorporate all of the points agreed upon with the Seller.

Below the email sent this evening.

Best Regards,

Fanbot

Good evening John,

I have drafted the required documents i.e. The Lease to Purchase Option, The Lease to Own Agreement and the Purchase and Sales Agreement subject to the exercising of the Lease to Purchase Option. (Dates mentioned in the documents would need to be adjusted.)

Please feel free to make amendments where you think necessary and we can discuss these points. It would be preferred to have your attorney review the documents to ensure that your understanding is correct in all perspectives.

Let me know if you wish to discuss the documents prior to signing. I would be happy to meet with you.

Thank you and I sincerely hope that this will be a win-win situation for us both.

Best regards,

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


Intersting

Wow, God Bless.


Intersting

Wow, God Bless.


Fanbot

YOU GO FANBOT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Great for you!!!! you are now a deal maker, Congratulations and again thank you so much for everything you have shared with me! it is an honor to network with you.

keep it up.

Luiz

__________________

"Obstacles are what you see when you take your eyes off your goal"
Dean Graziosi

Live, Love, Laugh!!!!!


fanbot,

Thanks for sharing your story and congratulations for taking action. Keep up the good work. I look forward to reading about your future creative deals. Good luck and cointinued success with real estate investing. Believe and Achieve! - Joe

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FINALLY

The seller's attorney is reveiewing the contracts. Electrician has come in at about the estimated costs (between $1250 and $1500) which leaves $2500 for other repairs including the AC. WIll be a tight fit. AC can be swapped out for two window units. Would need to call my AC repairman.

Can't wait to hear from the seller on the acceptance of the contracts.

Fanbot

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


Wow!!!

Awsome information.

__________________

Richard Armendariz


Thanks for sharing

Thanks for sharing your deal with us. We look forward to hearing much more deals. God Bless.

Sandra

__________________

"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.


FINALLY

Received the revised contracts from the sellers attorney. Well to be honest, as seller you have all the warranties. As a prospective buyer, you have viurtually no leg to stand on. As the repairs are to be funded by me, the negotiations will now start in all earnest.

I want to record the Option to Purchase, lawyer re-inserted the clause that no recording is to take place. The only remedy that I would have should the seller sell the property after my rehab to another party, is a recorded Option to Purchase.

Alternatively a mechanics lien on the property for full blown repairs would help somewhat as these always have to be paid first. Will not help in a bankruptcy of the seller though. Neither would the Option to Purchase.

Wish me luck on the negotiations.

Fanbot

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


FINALLY

Waiting on the seller to review the offer I made. Adding an indemnification clause in the Lease Option to Purchase i.e. if the property is sold to another party while Option to Purchase is still valid, all monies spent by buyer on the property etc must be refunded.

On the other hand received a call from a prospective seller who lives in MI. His property is currently vacant and in need of repairs. Will be looking at the property this weekend.

Depending on how much the owner owes, either a Lease Option to Purchase with a Lease to Own Agreement or hopefully a seller financed loan.

I wrote 13 letters to owners. 8 letters had been returned and only 1 answered. For direct mailing not a bad response. The 8 letters can be mined by using a skip trace service.

Best regards,

Fanie

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


Owners

Fanie,
Interested in how you are finding owners. Are they distressed/ foreclosure/pre-fore, or FSBO? How did you find them ie: listing service, lawyer, realtor, ect. Or are you using a website ie: foreclosure.com, zillow, trulia, FSBO.com? Really interested. I am getting stuff together to make bandit signs for pre-foreclosures, and right now I have only two tenant buyers lined up. Do you also have multiple buyers lined up also? If so do you market for them, and do you target investors or tenant buyers? Sorry for the but load of questions. THis is where I get timid. I can lock up a deal by myself because I am to blame and hold accountable to myself. But when I tell some one that is in pre-fore/ foreclosure or distressed that I believe I can help them find a buyer in seven to fourteen days I really feel the pressure. I just want to be known as a man of my word, deceit (telling
someone you can do this and not delivering based on technicallities) to me is the same as lieing. I just couldn't stand the thought of looking someone in the face and telling them "I couldn't find someone to take the property off your hands, see you at the court house steps." If you could answer would greatly appreciate it.

__________________

Proudly serving God, You, and Country,
Edwin Epperson

"The greatest mistake you can make in life is to be continually fearing you will make one."
-Elbert Hubbard


Owners

Hi Elbert,

At this moment the purpose is to lock the properties down with the promise of repairs to be made, the monthly rental and a lease option. I'll post the last email from John. The idea is then to get the property into a rentable condition and rent the properties to others. Within the space of two years (minimum term of the purchase option) the property is acquired for the Lease Option to Purchase price. If during this time I find a buyer I'll of course buy and sell the property in a simultaeneous closing. I have also agreed with the seller on equity sharing.

Finding the owners appears to be realtively easy. I go through area's of town with which I am reasonably familiar looking for properties; vacant, boarded, for rent, for sale. I then x-ref these against the county records and write each owner a personalized letter on those properties that interest me.

At this stage I do not have to face an owner other paying the monies agreed upon and the worst case scenario is that I have paid a premium and fixed up a property for nothing.

This way the only stress that occurs is to rehab the property in a short space of time. I also have partners who help with the monthly payment and the rehab (labor) and I pay for the materials.

Should you be interested in the documents I use (letters to the owner, Lease Option to Purchase, Lease to Own Agreement and Contract for Purchase)please send me a PM with your email address and I'll send you copies.

Best regards,

Fanbot

Email chain

Fanie,

I am not going to go through doing an escrow. You can make your checks each month out to the mortgage company ( xxxxxxxx) and put the account information on the check and I will forward it to the bank. That way you see that the check clears through your bank and I know that the check has been mailed on my end. I think that would be fair and secure for both of us. This has been changed to reflect in the lease to own agreement where the rent is described.

On the artical 11. in the Lease to Purchase Option that item will remain as I stated. However, I had legal add a clause on a different Article #13 that states if for any reason that this contract is broken by seller within the 2 years of the contract to sell property discribed in this contract, That the buyer will be reimbursed for all improvements and upgrades by the seller/landlord. However, it will also state that if for any reason you default on the contract that you will bear the cost of all improvements and no maintianace or upgrades will be reimbursed whatsoever. See attached Lease to Purchas agreement.

the added articles are 12,13, 14 have been changed or added.

Regards,

John

Good eveing John,

Just returned home. I'll review the changes tomorrow. From your mail it sounds very reasonbale. Thank you.

Best regards,

Fanie

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


FINNALY

Well the contracts are OK, these will be signed on Monday and the $2000 in Lease Option Premium will be paid to the seller and the first months rent.
Th electrician wil start work next week.
Hope to have the property up and running in 3 weeks.

This conludes this saga on one property. I am looking at another property tomorrow. Although the property is larger the owner has a bigger mortgage which is not that attractive. (Look at the county records for information on mortgage liens against the property.)

Regards and good luck to all.

Fanbot

__________________

The greatest force on Earth, compounding interest. - Albert Einstein


Great News

Fanbot,
I am happy to hear about your deal! I like how you enticed the seller with possible equity with-in the contract period(Win-Win).I think you should of stood firm on getting the option recorded,But not enough to lose the deal!

Thanks for sharing your info,It has helped me and I'm sure others!

__________________

Invest in yourself!


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