A Lease Option is a great type of deal whether you’re new to investing or a seasoned veteran. It’s basically a lease to own option while the buyer fixes his credit. Here’s how it works –

Find a motivated seller – you want a seller who is okay having a buyer making payments to them for awhile before they buy it. This is why it’s called a “Lease Option”, the buyer will be leasing the property for a period until they can qualify for a loan to purchase the property. Normally this takes two or three years, enough time for the buyer to clean up his credit. Since the property seller will be leasing the property, ask them about the minimum down payment they want from buyer. They’ll usually be happy with first and last month’s rent. In our experience the best leads for finding sellers willing to do a lease option are usually a Pre-nod leads list or an Absentee Owned property leads list.

Find a qualified buyer – this will typically be someone who needs to clean up their credit score but who has a steady job and money for a down payment. Be sure to do your due diligence with your buyer on the front end to save yourself a hassle on the back end. We’ll get into how to do this more in a later post. We typically find our buyers by sending yellow letters to a list of Renter leads.

Here’s how you make this deal work – if the seller has a mortgage payment of $800 per month they’ll want the monthly rent to be at least that. Let’s say the buyer agrees to a lease of $900 per month, and with the seller wanting down payment of first and last month’s rent, you’ll need to give the seller $1800 to close the deal. If the seller is behind on their mortgage, you’ll also need to use part of the down payment to bring the mortgage current. If they are two months behind that’s $1600 plus any bank fees. So taking the $1800 for the first and last month’s rent to the seller and $1,600 to the bank to bring the property current means your major expenses to close the deal are about $3,400. Any down payment you receive from the buyer in excess of this is your margin (minus your marketing and other costs). This can be anywhere from a few thousand dollars on up, depending on the value of the property, how much the buyer can afford, what you feel your time is worth, etc.

Would you rather compete with Microsoft or nobody?

Easy answer, right – who on earth would choose to compete with an entrenched company that has enormous resources?

Yet this is exactly what many real estate investors and Realtors are doing.  They’re going after the same leads the same way as everyone else in their community, using saturated approaches like Craigslist and newspaper ads.  Then they wonder why their results are the same as everyone else’s.  Some people think outside the box and take an approach that’s different from their competition, getting breakthrough results.  Which one would you rather be?

This is a great question and the answer is… it depends. The biggest factor to consider when choosing a mailing list is your target audience. Are you looking for a property seller, a property buyer, or both?

Popular lists for finding property sellers include Pre-Notice of Default (Pre-NOD), Absentee Owner, and High Equity leads (also known as Free and Clears). A Pre-NOD lead is someone who is 30, 60 or 90 days past due on their mortgage, and they may need to sell their property to prevent foreclosure. Absentee Owner properties are typically vacation homes or rental properties, but can also be homes that someone has moved from but not yet sold. There are also High Equity leads, which are people with at least 50% equity in the property. For more information on these leads, click here.

The more frequently used lists for finding buyers include Renter and High Net Worth leads. Renter leads are people who are currently renting. They may be living in an apartment complex or a duplex. High Net Worth leads are people who have liquid assets of at least $1 million, and this list can be filtered by people who are or are not real estate investors.

These leads all come from credit bureaus, they are not public knowledge. This means someone using one of these lists will have much less competition for a property or individual because the information is not publicly available.

We have a new online special for each of these leads, order now before it’s gone!

We get this question a lot. How can people possibly get a 5-15% response rate with a direct mail marketing campaign? The simple answer is that our letters don’t look like a typical marketing letter.

Our letters use the handwriting of a person, not computer generated font. There isn’t a clear window on our letters, they don’t come in a business-size envelope, they don’t have a bulk mail stamp, and most importantly, the envelope isn’t typed! Since our envelopes are hand addressed and the letters are printed using a person’s handwriting, people want to open them to see what is inside. Our letters look like an invitation or a thank you letter, not a marketing letter.

Still skeptical? Request a free sample today and see what it’s like to receive one yourself!

We just added a Return On Investment Calculator to help make your investment process even easier. It’s simple to use and will help you determine the return on your marketing investment. Click here to try it out.

I ran an ad in one of the smaller newspaper publications. It started running on April 19, 2009 and ran for 30 days. Overall, the ad resulted in 78 phone calls. Out of those 78 phone calls, I was able to collect information from 38 of these buyers regarding their contact info (including email address), their monthly payment budget, how much they have for a down payment, and what they’re looking for in a house.

The prospects are driven to a phone number where a live person answers (between 9 am and 5 pm), or a recorded message (after hours) telling them to leave me their name, phone # and email address.

Once they do this, I add them to my buyers database and begin marketing to them, sending them to my website so they can check out the homes that I have for sale.

Below is a screenshot of my actual email inbox, showing you only a list of the people that have left messages after hours. (Click on the image to see it larger).

This ad really did the trick!! I have 38 more people to sell my houses to, and it only cost me about $2.00 per lead. I think I’ll run that ad again………

Here’s what my ad said:

“OWNER FINANCING

THREE NICE HOMES TO CHOOSE FROM

24 HOUR RECORDED MESSAGE

(904) 555-5555 ”

Of course, the ad has my real phone number for buyers.  I chose a smaller publication newspaper to keep my marketing cost low.  I I had run this same ad in the Florida Times Union, it would have cost me nearly $500 for a month. Instead, I only paid about $80.  Not too shabby…… Now I gotta go…Ive got to get to work on selling some of these houses I have for sale!!

Are you struggling with your bank account, but still determined to get started in the real estate business?  I totally understand where you’re coming from!  It’s not easy trying to juggle around all of the expenses that are associated with starting in the real estate business.  After all, you have education and training, travel, hotels, business cards, websites, marketing campaigns, and now answering services.  Gheez….You’d think this is a real business or something. (Who’da thunk it?)

Well, this one is for the aspiring young investors out there who need an inexpensive way to get their calls from sellers answered.  Good luck!!!!

Sample Craigslist Ad:

I need someone to answer and pre-screen my calls. These calls are coming in as a result of direct marketing efforts to owners of real estate that are in unique situations (foreclosure,divorce, bankruptcy, probate, etc).

Your job will be to answer the call, and ask them a series of questions that will be provided to you by me.  I will pay you $1.00 per call for each pre-screening form that you turn in to me (that is completed) , and $.50 for each call /message that is turned in (or partially complete).

This can be done from your home, but I do need someone who can take calls on the “fly” – and maintain a professional sound to the caller (no TV, dogs, or other noises in the background).  I will forward my own number to you so that you can take the calls.  I will pay you once per week on Fridays – either via PayPal or check (your choice).

Reply to my ad if interested. I will call you to do a a phone interview and a “test run”.

Discover how to talk to sellers of real estate, and find out how to discover the Motivation Trigger Words that always indicate motivation. Save a great amount of time and money by listening to this podcast and using the tips and techniques that are outlined in this podcast!

One of the most important things that you can use to present yourself to a seller (or buyer) of real estate is credibility. You can talk all you want about how smart, proficient, professional, and helpful you are, but the person you’re talking to may still be reluctant to do business with you.

That is why I want you to start getting testimonials from your clients and start using them in your presentations! There is nothing quite as powerful as the spoken testimonial from someone who has used your services and is pleased. When they are willing to write a testimonial on paper and allow you to share it with your potential clients, that is a powerful recommendation.

Even better than written testimonials are video testimonials. These days, everyone should have a website (or at least a laptop computer). You can easily capture testimonials on video and post them right to your website – or you can keep them on your hard drive and play them for your potential clients during your presentation. This technique will close some deals for you without you having to say another single word.

Here’s what I do: Just as soon as I’ve agreed to terms with the seller or buyer, and the contract has been signed, I pull out my checklist to make sure that everything has been completed. Contract, signatures, email addresses collected, all of that technical stuff. Then I ask the seller, “Have you been happy with the service that I’ve provided”? They have 100% always said “Yes, of course!” I then say “Well, then you wouldn’t mind giving me about 15 or 20 seconds of video that I can use on my website, would you?”

I carry The Flip Video in my bag with me at all times when I’m on an appointment. Then I pull it out and tell them “When the red light comes on, just tell me your name, and how I was able to help you in this transaction”. Then I hold the camera up and hit the Record button.

I have never had anyone tell me “No” to this. Sometimes they are a little nervous because it’s the “camera in their face” syndrome, but with a little help from me about what to say, they get through it with no problem. And then BAM! I’ve got a video testimonial that I can use on my website and in my credibility kit for life.

Check out just a few of the video testimonials that I’ve captured on video:

NOTE: This blog entry is only for fun!  Don’t take it too seriously. Thanks………(Continue reading now)

1.  “Did you just wake up or did you forget to brush your teeth”?

2.  “Ooh, is that an onion I smell?”

3.  “Did you buy your house in this condition or did you tear it up by yourself?

4.  “Quit talking and just sign my contract”.

5.  “I just started in this business and have no idea what I’m going to do with your house”.

6.  “How did your neighbors put up with these dogs?”

7.  “How long has that pork chop been sitting on the kitchen sink?

8.  “Have you ever heard of a vacuum cleaner”

9.  “They sell these little things in the store called roach motels.  They work great. You should buy some.”

10.  “Could you please go put on some clothes?”

Note: The Top 10 list is for entertainment purposes only. Sometimes is does good to lighten up a little.  You’ll see more Top 10 lists coming, no doubt!! Feel free to leave comments with MORE THINGS NOT to say to a seller. Contributions were made available by real people who deal with real people like this! (so there is honesty in humor)……Have a good one!