Getting Sellers To Agree To Sub-lease
Hey all,
Question: Lets say I meet with a seller and tell them I'll take over their payments and give them some option consideration and pay for monthly expenses and they agree. How do I tell them I plan on sub-leasing their property without them saying "oh we thought we were renting to you, we're not interested in sub-leasing.
Any suggestions would sure be appreciated.
Thanks
Robert
Just have in your contract for purchase that you have the right to Sublet the property. You don't have to come out and say it, just have it in your contract. If they ask you about it - Just tell them that you just want to have the added security of being able to rent it out if you need to.
Good Luck!
Matty Kling
How are you structuring this with the seller? As a sub2 or as a L/O? With a sub2, you are taking title and shold be aboe to rent it out on your own without approval from the seller, as they gave you control of the property. If it is a L/O, then these people are not yet selling the house to you, so you need to put the right to sub-lease in your agreement.
Regardless of what you do, tell them what you are going to do.
If you are L/O'ing the house, there is no need to elude the question. Tell them you are an investor and you plan on L/O'ing the house and you will put a good T/B in the house and try to get this thing sold as quickly as possible.
If they say no, you say next.
I would definitely let them know what's going on.. They have the right to.
I think that if you have a motivated seller on your hands who wants debt relief, he/she will not care what you do as long as the payment is made and their credit is safe. All you have to do is tell them you're an investor and if they would like for you to make their payments you will have to place a qualified tenant in the property. If they say no they must not really be motivated.
But you can still offer to option the house WITHOUT making the payment.
Thank you all for your replies.
Mattfish, I understand what you're saying but I don't want to lie to anyone or be deceitful - that's just not me. I agree with Nebulousd and Pino. I'll probably tell them the truth as the subject comes up and if the deals not there, then its not there and I'll just move on.
Pino - Not sure what you meant by "you can still offer the option without making the payment." Are you referring to the option down payment? If so, would that make the deal more like a subject to...?
You should buy Ron Legrand's cashflow library course. You can get it on this site for under $300 and its a $1.5k value. You'll learn a lot.
You can put the property on an option to purchase (without giving the payments or guaranteeing the purchase). Basically, you tell the person that you will try your best to get the property off their hands.
Example:
Person owes $130,000 on the property
it worth: $210,000
He really needs to get rid of it fast.
You get it on the option to purchase in 60 days for $160,000 and try to sub-option it for $175,000 within that timeframe.
Again, if you're serious and don't have a mentor to work with, I recommend at least getting Legrand's course and learning more about exactly what you can do. You get copies of contracts and everything with the course.
Pino,
Funny you should mention Legrand. Since he's gotten such rave reviews, I just purchased his course last night on Ebay for about $230. I should be receiving it tomorrow or Sat.
I'd love to have a mentor but I just couldn't afford one at this time.
Thanks
REINV, you will love his course. I purchased it a couple of weeks ago and I love it. I got it on ebay too for around 230. I don't think you'll be dissapointed!
As far as affording a mentor, ask some seasoned investors you trust if they'd mentor you and you splitting the profits 50/50 from your first two deals in the first year. If they agree to take you under their wing, a 50/50 joint venture agreement would give them money and you would gain valuable experience from personal instruction from your mentor...a win-win.
Just a thought...
Todd
[addsig]