RTO Part 1 by Zack Wiest
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RTO Part 1 by Zack Wiest

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Visit http://createwealthin2011.com

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Or call us today at 717-901-7763

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RTO Part 1 by Zack Wiest RTO Part 1 by Zack Wiest Document Transcript

  • Selling Your Properties Via the Rent to OwnTechnique.IntroductionWhat is the Rent to Own or Lease Option Technique?The Rent to Own technique and the Lease Option technique are one in thesame. There is absolutely no difference in the twoexcept the name. When using this technique you aresimply leasing your property to an interested party andgiving them the option to purchase the property fromyou sometime during the lease period.We call this interested party a tenant/buyer becausethey are a tenant today and hopefully a buyer down the road. Dont confuseoption with obligation. When using this technique your tenant/buyer has noobligation to buy, but they do have the option of buying if they so desire.In most cases you will use this exit strategy as a way of creating a premiumpriced sale in the very near future where it was not possible otherwise.The reason selling the property through conventional methods was probablynot an option to you, or at least not an option at a premium price is becausethe types of properties that work best for this type of technique areproperties located in areas that are predominantly tenant occupied.When selling properties at premium prices the conventional way you willwant to stay in areas that are predominantly owner occupied thereforegreatly reducing your buying areas.When you have the Rent to Own technique as part of your real estatearsenal you now have the ability to buy in tenant occupied areas and stillrealize the same profits you would in owner occupied areas. Having thisbroad of a market to buy in greatly increases your chances of buying atgreatly reduced prices on a more consistent basis.Zack WiestPaDEals.com717-901-7763 Ext. 300
  • Who is Your Target Market When Using This Strategy?Your target market when selling propertieson a rent to own agreement are hardworking, honest people who for one reasonor another have credit issues that arepreventing them from obtaining a mortgageto buy a house the conventional way.Due to their credit issues they are willing topay a premium to you in order to at leasthave a fighting chance of realizing theirdream of homeownership. Another reason they are willing to pay a premiumis the condition of the homes you will be offering on these creative terms.In most cases you will be offering creative terms [rent to own] on newlyrenovated homes. When screening a prospective tenant/buyer for one ofyour properties you want to look for the following criteria:Steady Employment - They will need a steady job that pays a decent salaryin order to eventually qualify for a mortgage to buy your property. Theirdebt to income ratio should not exceed 50%.Active Checking Account - The best way to collect monthly payments fromyour tenant/buyer is by check. Collecting rents by check allows you to createa paper trail of on time rental payments which may come in handy when itcomes time to get a mortgage for them. Having 24 months of on time rentpayments, verified with cancelled checks goes a long way with a lender andmay be the sole reason your tenant/buyer is approved.Cash Reserves - You want to make sure they have enough money to satisfyyour non refundable option deposit requirements plus any rent or pro ratedrent that will be due at the time of move in.Respectable credit, not flawless but respectable - All prospectivetenant/buyers will have credit issues. It is your job to find the ones thatZack WiestPaDEals.com717-901-7763 Ext. 300
  • have a chance of eventually cleaning their credit up and obtaining amortgage to buy your house.We suggest you not consider anyone who owes more than $7,500 incollections. Also we do not suggest approving people who have collectionaccounts with past landlords or management companies. If they didnt paytheir last landlord, what makes you any different? We also do not like to seemore than $1,500 in back child support.Log onto PaDeals.com right now to be part of the most exciting real estateopportunity found anywhere.PA Deals, LLCZack WiestPaDEals.com717-901-7763 Ext. 300