Property Damage On A Lease Option
When I control a property with a lease option what is the best way to protect myself from property damage?
Even if a sizable option fee is held its not good insurance. Is there a clause I can use in the lease or what should I do.
Yes, you put in the lease that the tenant is responsible for repairs and maintenance. The specific wording can be obtained from many lease agreements, or L/O courses. You will still want to run it by your attorney to make sure it conforms to your state laws.
Risk vs reward, damage to a "rental" property should be factored as a small percent in your cash flow analysis. You are a landlord for wear and tear, so damage for us is stipulated in the contract as a forfeit clause to say, "significant damage beyond normal wear and tear can be considered as grounds to forfeit all rent credits issued to the tenant toward the purchase agreed price..."
Eric & Rosa
[addsig]
Have the Option contingent upon the Lease. Breach any provision of the Lease, you revoke the Option. Inspect the property on a regular basis to ensure compliance. If you are both strict and fair, you shouldn't have a problem if you have collected at least 5 percent in consideration.
I bet there is a Real Estate Investment Club in your area? That would be a great way to network.
Post an ad in the paper.
"Expert investment property scout will work for you" Call XXX-XXX-XXXX
Why dont you start calling all the investors advertising in your local paper under "WeBuyHouses" or "IBuyHouses" and see if one of them will take you under their wing..
I would also recommend you start reading all the forums on here about "wholesaling" and learn how to do that. That is also a good way to start out.
Best Riches,
Jeff Adam
[addsig]
We get calls & email EVERY week from bird dogs responding to our published ads.
A word of advice. The have your act together PRIOR to calling investors. We know what we want, and if it is training you are seeking, just say so. It is so frustrating when we ask a birddog to send us the basics: summary of experience, contact information, lead sheet, pricing guidelines, etc. and you receive nothing!
Frustrated by the ROOKIE birddog,
Eric & Rosa
[addsig]
Find your first property, and then place the following ad in the paper:
HANDYMAN SPECIAL!
Cheap! CASH! 3/2 North
(555) 555-5555 lv msg
Make sure it runs through a Sunday. The rehabbers will contact you. Then create a Buyer List.
[ Edited by LeaseOptionKing on Date 09/13/2004 ]
Leaseoptionking,
I am creating a list of beyers that rehab from all my voice messages...I get that. But what do I do with the property? Are you saying that I should find a property and interview the owners and get all the particulars and then advertise it??? Then when investors call me I have the info???? That sounds right. Then, at that point, I ask them about me bird dogging for them on a regular basis? When do I approach the subject of the contract for my payment for sevices rendered?[ Edited by bfinch on Date 09/13/2004 ]
My suggestion would be to put the property under Contract to secure your interest, and then assign the Contract to the Buyer for a reasonable fee ($500 or $1,000). But you could just get the pertinent info from the Seller and introduce yourself as a bird dog to each caller as well as discussing your fee and what they are looking for.