Probably the hardest part of Lease Options is finding the homes from motivated sellers. That is because the seller usually has many other possibilities before they consider Lease Optioning their home to someone like me. When we started out we weren’t getting a lot of people calling us with houses. So what we decided to do is put a house under Lease Option before we even have a Tenant-Buyer. The problem with that is that you end up having to “carry” these units if we don’t find a Tenant Buyer right away.

What we ended up doing was creating this Preliminary Market Assessment (PMA). A PMA is an agreement for us to start marketing a property without any financial obligation on our part. We spell out the terms and conditions that are to be included in the eventual documents, the Lease and the Option Agreement. Basically the PMA reduces my liability should we not be able to place a Tenant Buyer in this home. We usually market the property for 30 – 60 days looking for Tenant Buyers. If we don’t find anyone in that time period, we usually let the property go.

Happy Investing,

Jim Pellerin

Investor, Advisor, Speaker, Coach, Writer

My Book: 7 Steps to Real Estate Riches
My Blog: The Realty Millionaire
Facebook: The Realty Millionaire
Twitter: @RealtyInvest

© 2012, JimPellerin. All rights reserved.

Real Estate Investing: Is it an Alternative to the Stock Market?

With the recent economic situation and the big losses in the stock market, people are starting to look for alternatives for their investments. Most people I know have all of their investments in “diversified” mutual funds. The big problem is that their diversification was still within one vehicle, the stock market. The other problem is that have no control. Real Estate Investing should be considered, but as part of your larger portfolio. One of the nice things about owning Real Estate as an investment is that you have options that you can control. For example, a fix and flip that you can’t sell could be easily converted into a rental property.

There are many ways you can get involved in real estate investing. You can also diversify your Real Estate investment portfolio to a certain degree and you can chose to be active or passive. You could invest in rental properties and partner with someone else to manage it. You could manage the investment and partner with someone else to be the primary investor. You could be the mortgage holder of an investment. You could get involved in Lease Options or even renovation projects. You could even be the second mortgage holder of someone else’s investment or buy a second mortgages at a discount. Don’t want to own anything but you are a great salesman? How about doing some assignments or referrals.

All of these investments need to be looked at as part of your larger portfolio and your level of risk and whether you are passive or active. Ideally, your goal is to become a mostly passive investor so you can achieve your ultimate goal of financial independence. Some people call this retirement.

Happy Investing,

Jim Pellerin

Investor, Advisor, Speaker, Coach, Writer

My Book: 7 Steps to Real Estate Riches
My Blog: The Realty Millionaire
Facebook: The Realty Millionaire
Twitter: @RealtyInvest

© 2012, JimPellerin. All rights reserved.

The Power of Positive Thinking

I think I can. I think I can.

The power of positive thinking has the ability to transform you from wanting something to acquiring that something. Of course, you are never going to win the lottery if you don’t buy a ticket. What I mean is that you also have to take action. (That’s the real Secret). You have to convince yourself that it will definitely happen. Lots of other people have done what you want to do in Real Estate Investing.

Positive thinking helps you push through your problems and the road blocks that you will come up against along your path to success. I remember when I was first starting up my lease option business. I was having a hard time putting our first deal together. We had a lot of potential tenant buyers and a lot of potential sellers. We just had to match the two. I had to keep telling myself that this is going to happen because I knew so many other people who have successful Lease Option businesses. There are a lot of people who quit before they meet their goals. These are the same people who say that Real Estate Investing doesn’t work. Real Estate Investing is still the vehicle that has made the most millionaires.

Eventually, we ended up with our first deal. Looking at that deal today, we would never have done it, knowing what we now know. But we learned a lot from that one deal. Within a couple of months we did 3 more deals. In December last year, we did 10 Lease Option transactions. We did about 20 deals last year. We are doing about 2 a month and plan on doubling this every year. I am “positive” this will happen. There is no reason that I can see why this won’t happen.

Be persistent and stay positive and success will happen.

Happy Investing

Jim Pellerin

Investor, Advisor, Speaker, Coach, Writer

My Book: 7 Steps to Real Estate Riches
My Blog: The Realty Millionaire
Facebook: The Realty Millionaire
Twitter: @RealtyInvest

© 2012, JimPellerin. All rights reserved.

There Are Experts Everywhere

I gave weekly talks related to Real Estate Investing topics. I call these RISE Talks to coincide with my other RISE products: RISE Boot Camp (my 3 day Real Estate Investor Transformational Weekend) and RISE Advisor which is this Blog. I usually talk about topics that I have a lot of experience in and that I am generally good at, or at least better than most people. I have given 3 RISE Talks on Lease Options and tonight was a topic on Nothing Down Creative Financing.

The interesting thing is that I learned something new from my students almost every night. One night I learned of a unique way to create motivation in a seller by getting them to participate in the profits of a Lease Option deal (thanks Greg). Another night, I learned another exit strategy for my Sandwich Lease Options. Rather than do a double closing, why don’t I just assign the contract I have with the seller to the buyer and they end up buying directly from the seller. This helps avoid some land tax problems that you may have with doing 2 closings on the same day.

Tonight I learned from a Mortgage Broker who was in the audience about an interesting product that is available to everyone. You can declare a second home as owner occupied (vacation home, relative, etc.). This reduces the amount of mortgage insurance you need. In conjunction with this 2nd home program, there is 100% financing for that property.

Teaching is also Networking,

Jim Pellerin

Investor, Advisor, Speaker, Coach, Writer

My Book: 7 Steps to Real Estate Riches
My Blog: The Realty Millionaire
Facebook: The Realty Millionaire
Twitter: @RealtyInvest

© 2012, JimPellerin. All rights reserved.

How to Sell Your Investment - 

Eventually, you may want to sell your Real Estate Investment. Of course, this will depend on the investment you own and the exit strategy you chose when you acquired your investment in the first place.

For example, if you are working with referrals or assignments, they already have a built-in exit strategy. You are looking at these investments with the intent to sell to an investor. When you are working with Lease Options, you are leasing the investment property to the Tenant Buyer who will eventually buy the property from you at the agreed to Option Price. That is, of course, should they be able to exercise their option and nothing goes wrong.

When you buy a property as part of a “Buy, Fix and Sell” strategy, you will want to sell at the best price and you will want to sell fast. The best way to do this is to hire a Realtor. A good Realtor will be able to market your property properly so you get the best return for your investment. They will be able to sell it faster so that you don’t end up carrying the property for too long.  The longer you carry the property, the longer it is on the market, the less profit you make because of all of your carrying costs such as mortgage, taxes, utilities, etc. Time is money.

If you own a rental unit as part of a “Buy, Rent and Hold” strategy, you should also consider using a Realtor. Sure, you may have more time because you have a positive cash flow from the building and you don’t have to carry your expenses. But just think of all the time you are wasting advertising the property, showing the property, etc. You want to focus on the things that bring you more money. You are selling for a reason and a good Realtor can help you sell fast and actually pay for their commission in the long run.

I try to always use a Realtor when selling any of my properties.

Happy Investing

Jim Pellerin
The Realty Millionaire
Making People Rich Using Real Estate

Investor, Advisor, Speaker, Coach, Writer

My Book: 7 Steps to Real Estate Riches
My Blog: The Realty Millionaire
Facebook: The Realty Millionaire
Twitter: @RealtyInvest

© 2012, JimPellerin. All rights reserved.