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.

Yep, during the holidays. Think about it this way – the envelope is written by hand, there’s a commemorative stamp on it, and it looks just like the Christmas cards everyone is receiving right now, so you know it will get opened. Also add the fact that this is a slow time of year for people selling a house, so they’ll be happy to get any type of lead from a prospective buyer. Then think about all the other investors who are “taking a break” at this time of year, and WHAMO, no competition!

Now you can make money just by talking to your friends! Join our affiliate program and earn a commission on every referral, whether it’s for letters, leads or both. There’s no fee or investment to get started and we take care of all of the work. Just tell your friends and colleagues about us and starting earning your commission today!

There’s an article on us in the September/October issue of Personal Real Estate Investor magazine. It’s on page 43, and it talks about the effectiveness of handwritten direct mail. Pretty neat, huh?

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!

All we need from you to get started on your marketing campaign is the 10 zip codes for your leads. Now it’s easy to find those, too! Just click here and you’ll be directed to Hipcodes, a great new site that will help you find your zipcodes!