Let's call this....Lease/Option Research
This is a question for all investors who Lease/Option houses regularly (Please Answer)
What are the top 5 things you look for in a Tenent/Buyer you intent to sell on a L/O? (Please List 1-5 then your answer)
Thank you for your cooperation in advance. I am performing some market research to fine out what investors are looking for.
[addsig]
Total Amount of Down payment
Total Monthly Payment
Ability to pay monthly payment
Ability to get refinanced
Overall credit history
Quote:
On 2003-03-16 22:56, emoore wrote:
Total Amount of Down payment
Total Monthly Payment
Ability to pay monthly payment
Ability to get refinanced
Overall credit history
I would add some additional items and thoughts:
1) References from prior landlord and creditors (but this is also in "overall credit history" above).
2) Recent credit history is more important that problems they have had in the past (most L/O persons are doing L/O buying because either they do not have enough down payment to buy a house or can't get traditional financing because of bad credit).
3) Their total "back end ratio" meaning the percentage of their monthly debt payments to their monthly income. One of the best measures to determine if they will have problems paying in the future.
4) "Ability to get refinanced" is not important to me because if they do not purchase the property at the end of their lease, I simply turn around and L/O to someone else for additional profit.
Taxjunkie
Thanks for the responses, emoore and taxjunkie.
E - glad to see you back on the seen, congratulations again.
Tax - you are the man, I have been reading your post, very, very detailed. Thanks
Please keep them coming everyone, or has these two pretty much given all that is needed.
[addsig]
I'll tell you the things that ensure that they won't be moving into one of my properties.
1. Eviction (a forclosure with extenuating circumstances might be OK)
2. Unpaid Gas/ Elec. Bills
3. Pickiness at the condition of the property or the conditions of the financing. An attitude of gratitude is a must.
Other than that, they pretty much tattooed it on your forehead.
Good Luck,
Shawn(OH)
Thanks for everyones responses, just a few more questions.
1. Can someone give a specific questions to gain insight to ones credit history? (May be obvious to you, but trust me, not to me: please state the obvious)
2. How do you calculate the downpayment you ask? Is there a formula or something I can use?
3. How many responses on average do you get from your classified ads?
4. What does your classified ads say?
5. Do you think "Rent To Own" plus a phone number will get any responses?
6. Additional feedback and assistance.
Thanks
[addsig]
1. Can someone give a specific questions to gain insight to ones credit history? (May be obvious to you, but trust me, not to me: please state the obvious)
You'd be amazed at how difficult it is to get a feel for creditworthiness (sarcasm alert). Ask them Can you tell me aboutany credit problems you might have? They will spill their guts to you. They are used to being turned down and will talk about their problems freely. Everyones favorite radio station is WII-FM (What's in it for me). Ever notice that when there is a divorce situation, everyone's credit stinks, and it's always the other ones fault.
2. How do you calculate the downpayment you ask? Is there a formula or something I can use?
Get as much as you can. In some areas, 3k is a lot. I sold a 115k home with 1800 cash an a 77 MH with a 4500.00 balance in trade.
3. How many responses on average do you get from your classified ads?
20-30
4. What does your classified ads say?
"Owner will Finance" No Banks!
3BR 2Ba
740-555-1212
5. Do you think "Rent To Own" plus a phone number will get any responses?
personal choice
6. Additional feedback and assistance.
Good Luck,
Shawn(OH)
furiousinc
1. We look for debt that is a year plus old (easy to negotiate pay off) or medical bills. These dont count against you much.
2. We shoot for 3% min. My mortgage guy can do a refi. with 3% and proven payment on time of rent
3. This is going to depend on the amount of the mo. and down. The more the payment the more we push "white collar" papers.
4. Our first line says BAD CREDIT OKAY the rest is just house info., mo payment, and downpayment neg (gets more calls and they can "find" the money if they like the house)
5. I have not used RENT TO OWN
Stick to the systems that others have put together, and you will do well.
Sire
Quote:
On 2003-03-26 04:16, furiousinc wrote:
Thanks for everyones responses, just a few more questions.
1. Can someone give a specific questions to gain insight to ones credit history? (May be obvious to you, but trust me, not to me: please state the obvious)
My application for the tenant/buyer is a standard mortgage app. I then have my mortgage broker who is part of the team pull the credit at no expense to us. He then puts all candidates in an excel spreadsheet ranking them in order of how they can be approved. I take the highest ranking one with the highest money to put down. I can then go back to this list when the time comes to put someone else in.
Quote:
2. How do you calculate the downpayment you ask? Is there a formula or something I can use?
I would work off 3%. Generally with a newer home (that is all I purchase), you can get this or more. Squeeze as much out of them as possible so it will be easy to get the refinanced.
Quote:
3. How many responses on average do you get from your classified ads?
Ads looking for sellers : maybe 2-3 dozen per month
Ads looking for buyers: 100+ per ad
You know my email if you need any other advice.[ Edited by emoore on Date 03/26/2003 ]