Some of your Nomad clients will have more than the down payments needed to do the plain vanilla Nomad model of buying one property a year. Some will have additional down payment to start with and some will be actively working toward having multiple down payments especially if they're using a lease option exit.
For example, in our class on How to Acquire a Multi-Million Dollar Real Estate Portfolio with Just $3,000, we discuss deliberately trying using the lease option exit strategy to be buying multiple properties each year and putting lease option tenant buyers in those properties.
One of my personal philosophies (and one I hope you'll adopt) is what can I do to make my Nomad's lives easier, better, more fun and more profitable. You'll see this reflected repeatedly when I discuss each step of the systems and processes. For now, I want to share with you that I will often advertise for my Nomads to help them find lease option tenants buyers and taking the first phone call.
I'm sure I'll cover that in detail in a future post, but for now, I want to share with you a sample of an ad I might run to find a lease option tenant buyer using a property for sale in the MLS that I have explicit permission to market (from the listing agent).
Here's just one example of a sample ad that I've run on CraigsList…
New construction home available for Rent-To-Own with as little as $9,000 option fee (that gets applied toward your purchase).
Rent now and get a loan to buy it at a pre-agreed upon price anytime in the next year. My investor client may also consider up to 3 years for you to buy it from them at slightly higher prices for year 2 and 3.
Rent would be $1,900 per month.
Purchase price in the first year would be $324,000.
– 3 bedrooms
– 2 bathrooms
– Desirable ranch floor plan
– 2 car attached garage
– Brand new home (construction estimated to be completed in early 2017)
– 1,516 finished square feet of open living space
– 1,370 unfinished basement square feet
Rent To Own Program Details
For the Rent-To-Own, rent would be $1,900 with an upfront minimum option fee of $9,000 which is applied toward your purchase. Flexible 3 year rent-to-own period gives you time to improve your credit, wait for a bankruptcy/short sale to roll off your credit report, establish job history or self-employment income and ultimately get your own loan and buy the property from the investor/landlord.
Price if purchased in year 1 is $324,000.
Price if purchased in year 2 is $333,720.
Price if purchased in year 3 is $343,731.
This program allows you to move-in to your ideal home today and lock in a purchase price to buy it within the next 3 years. The investor/landlord would buy the home, mark up the price from what they paid today with some profit and rent it to you for up to 3 years while you get a loan and buy it from them.
Contact me at (970) 225-6989 for more details. If I am on the phone already, with a client or after hours it will likely go to voicemail. Leave a message and I'll call you back.
Or, skip the rent-to-own and buy it now…
If you can get a loan now, you can cut out the investor's profit (on price and monthly rent) completely!
With good credit, you could skip the rent-to-own completely and buy this property with as little as $3,000 down with special conventional financing. Monthly payments with principle, interest, taxes, insurance and PMI would be about the same as rent would be on the Rent-To-Own.
Contact me at (970) 225-6989 for details and I can put you in touch with a lender that can work with credit challenges.
Home is scheduled to be built and available early 2017 (subject to possible delays in construction).
Listed by [LISTING AGENT NAME] with [LISTING COMPANY]. Marketed with permission by [BUYER'S AGENT NAME], Realtor, [BUYER'S AGENT PHONE]. Photos shown may not be of exact home.
When potential tenant buyers call in on this ad I talk to them briefly about the property and the program that my investor has and that I've described in the ad. Then, if it sounds like it is a good fit I might suggest they talk to a lender and then talk to my client.
If they can get a loan right now (and I tell the potential tenant buyer this and my Nomad clients know I tell tenant buyers this), they can cut out the investor's profit. If they need more time/work to get the loan, then I can put them in touch with the investor and ask additional questions and ultimately start the application process.
Why am I willing to do this? For several reasons.
Primarily because it is helpful and adds value to everyone… the listing agent, the potential tenant buyer, the lender, the Nomad client and me.
- The listing agent gets some extra marketing for their property.
- The potential tenant buyer gets a possible rent to own home but from someone that is telling them if they can a loan, they should just buy themselves (and I'm happy to then help them buy and maybe even become a Nomad).
- The lender gets to work with the new tenant buyer client now or fills their pipeline for the future when they do qualify for a loan. Plus, the lender may also be doing the loan for the Nomad client when they buy the property and offer it as a rent to own.
- The Nomad client gets someone willing to do some advertising to help them find a tenant buyer, do the initial call for them and then hand out a more qualified potential tenant buyer.
- And I get new buyer clients who called but actually can qualify for a loan and when my Nomad client buys a home to offer it to a tenant buyer on a rent to own, I represent them on the purchase.
Overall, it is improves the quantity and quality of my service in my business.
- REAL ESTATE BROKER: Setup Lease-Option Search Page on JamesOrr.com
If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease Option, then setup your search page on JamesOrr.com.
Talk to James to have him show you this and get it set up for you.
Mark this task complete when it is setup or if you decide you're not doing this.
- Customize your Lease-Option Search Page on JamesOrr.com
If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease Option, then after James sets up your search page on JamesOrr.com you will want to customize with your specific investing criteria.
Mark this task complete when you've customized your Lease Option Search Page on JamesOrr.com.
- Setup custom domain name for your Lease-Option Search Page on JamesOrr.com
If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease-Option, then after James sets up your search page on JamesOrr.com you may want to purchase and setup a custom domain name for it.
The custom domain name will allow you to use that domain name on your marketing and have it URL frame the page James set up for you.
Ask James and he can usually get you a domain name and set it up for you for about $10 per year.
Mark this task complete when you've purchased a custom domain and had it set up for your Lease-Option Search Page on JamesOrr.com.
- Partnership Optional: Create Partnership Explanation Video
- Determine your Photographer
You will want a Photographer to take professional photos of the property while it is vacant before you move in if this is a Nomad property or before a tenant moves in if this is a partnership purchase or a non-owner-occupant purchase.
We recommend that you have photos taken right after you close before you move in in almost all cases. You will use these photos when you're marketing the property to rent.
Ask your Real Estate Broker for a recommendation.
Mark this task as complete once you've decided which Photographer you will use to take photographs of the property after you close.
- Review Fair Housing Act
- Review "Tenant Buyer Sales and Marketing" Recording of Live Class
- Place directional signs to property
- Place "For Rent" (or "Rent To Own") sign in yard
- Write Property Ad
Write ad for Tenant and/or Tenant-Buyer using photos you took from when it was vacant.
Include date available, monthly rent, number of bedrooms and bathrooms, property features, info on the kitchen appliances, whether there is a washer & dryer in the unit, just the hookups, or none of the above, parking details, etc. Be sure to highlight attractive aspects of the property such as easy access to major roadways or pool access.
Review the ad to make sure you are not discriminating and are in compliance with the Fair Housing Act.
- Be prepared to answer your phone
Once you start marketing, be prepared to answer your phone.
As you market, prospective Tenants and Tenant-Buyers will expect to be able to reach you.
If they can't reach you that sets the wrong tone for the start of the relationship. You come across as an unresponsive landlord.
If you do miss a call, call them back as soon as possible. If prospective Tenants and Tenant-Buyers email or text you, reply quickly.
Answer prospective Tenants and Tenant-Buyers questions. It is normal for them to ask questions that are already addressed in the ad. I believe most people don't actually read stuff (including your ad) and they're looking at a number of different properties.
- Post "For Rent" (or "Rent To Own") ad on Zillow
- Post "For Rent" (or "Rent To Own") ads on CraigsList
- Post "For Rent" (or "Rent To Own") ads on local rental websites
Post your "For Rent" (or "Rent To Own") ad on other local rental websites.
For example, in Northern Colorado you may also want to post an ad to NorthernColoradoRentals.com as well.
Mark this task as complete when you've posted ads to these other websites.
- Review "Tenant Buyer Sales and Marketing" Recording of Live Class
- Class Watch "Tenant Buyer Sales and Marketing" Recording of Live Class
- Sponsor Read "Facebook Ads for Real Estate Agent and Lender Sponsors"
- Sponsor Read "100 Ways to Get a Nomad Client in the Next 12 Months"
- Sponsor Read "Lease Option Ad for Property Listed in MLS for Clients"