Rent to Own Seminar

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Thomas Wong (Crazy Thomas) and Navtaj Chandoke presenting valuable information on how to do rent to own in Canada. Rent to own is a great real estate investment strategy.

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  • We will hyperlink to the spreadsheet for them to follow through the calculation
  • Rent to Own Seminar

    1. 1. Lease Option Rent To Own SeminarReal Estate Investors Education & Mentoring Welcome! Copyright 2011 – World Wealth Builders – All Rights Reserved
    2. 2. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Disclaimers Information, strategies and opinions contained in this presentation areprovided for general information and convenience only. Since the particulars of each situation may differ and information may change rapidly, one must seek appropriate, qualified professionals advice before acting based upon any information provided by the World Wealth Builders or any affiliated association. Copyright 2011 – World Wealth Builders – All Rights Reserved
    3. 3. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring “How to make Money $$ Lease Option/Rent to Own”Canadian Real Estate Investment Copyright 2011 – World Wealth Builders – All Rights Reserved
    4. 4. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Want to learn fast, then… Copyright 1993-2012 – – World Wealth Builders – All Rights Copyright 2011 World Wealth Builders – All Rights Reserved7/24/2012 Reserved 4
    5. 5. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring What is it? • What is Rent to Own/Lease Option? 5Tuesday, July 24, 2012
    6. 6. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Where is the money?How to make money with it?1.Option $$ upfront2. Above market rent $500- $1,000 Cash flow a month3. No capital required4. Guaranteed return 6Tuesday, July 24, 2012
    7. 7. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring What is Rent-to-Own?• Rent-to-own your home• Lease with option to purchase• The program – Small initial deposit (part of down payment) – Monthly payment (partly rent, partly toward down payment) – Option to purchase the house at the end of the lease term
    8. 8. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring The Differences among Rent-to-Own’s• There are no regulated way of Rent-to- Own• Potential variations: – Initial deposit requirement from tenant – Amount of credit toward down payment each month – How to establish future purchase price – How to handle expenses during the term – Types of contract: • Lease with option to purchase • Co-occupancy contract
    9. 9. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Why Rent-to-Own? – Tenant• Opportunity to buy a house under difficult circumstances: – Not enough down payment – Bad credit or no credit history• Lock in purchase price when saving up for the down payment• Pride of ownership and flexibility in upgrading the property
    10. 10. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Why Rent-to-Own? –Landlord/Investor• More or less worry free tenant – Option premium – Tenant pride of ownership• Saving in selling cost• Lock in profit and cash flow• Improve cash flow• Secure investment• Helping people and earn money (Feels Good AAh!)
    11. 11. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring What are the risks with Rent-to-Own?• Tenant moves out during lease term – Non-refundable option premium – Contingency funding in place – Property at good location and value• Market condition changes – drop in value/not appreciate enough – Buy below market value – Work with tenant to facilitate purchase/extend lease term – Non-refundable option premium
    12. 12. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring What do you need for a Rent-to-Own project?• To put a Rent-to-Own Project together, you need: –A qualified Rent-to-Own tenant –A good property –Investor or investors to buy the property
    13. 13. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring How to make money in a RTO project?• There are 3 Key elements: – Buy below market value (aimed at about 10% below market value) – Rental income during lease term (look for property at a good capitalization rate, market rent v.s. market value) – Property appreciation in value during lease term (look for property at good areas, target at close to 5% on average, set realistic expectation)
    14. 14. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring The “Bag of Tricks”• We have many tools in our “Bag of Tricks” from finding tenant, finding investor to pull it all together.• Let’s look at a few of them
    15. 15. Lease Option Rent To Own SeminarReal Estate Investors Education & Mentoring The Rent-to-Own Process
    16. 16. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Where & How to get Rent-to-Own Tenant• Advertising: Kijiji, classified ad, signs, landing page/squeeze pages – Tips for Kijiji ads: • Pictures • Be specific about a property • Drive them to take actions (call NOW)• Referral, Referral, Referral – Current tenant – Potential tenant – Real Estate agent, Mortgage agent – Hair dresser – Tim Horton, Country Style…
    17. 17. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Basics of Your Marketing Efforts• Expose your services to many people• Attract the attention• Drive them to take actions – Call or email you – Leave their contact information (sign-up form on landing page/squeeze page)
    18. 18. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Expected Conversion Rate• 100-10-1 (100 people see your information, 10 people contact you, 1 resulted project)• A good Kijiji ad can expect about 300 people looking at it in 3 days
    19. 19. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring How to convince a potential tenant to work with our RTO program? (The first encounter)• Focus on establishing a rapport with the client• Clarify their understanding of Rent-to-Own• Gather as much information about them as possible – Current family situation – Current rental situation – Family gross annual income – Type of houses that they want – How much can they afford (monthly & down)• Set their expectation (realistic expectation)• Listen carefully and aim at providing them the benefits that they are looking for• Remember to ask for follow-up contact information and referral
    20. 20. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Tool to set Tenant Expectation Mortgage Calculator Rent-to-Own Budget Current Value of Annual Family Income $70,000 property $ 333,753.91 % for mortgage payment 32% Appreciation rate 5% monthly mortgage payment amount $1,867 Term of program 3 year Future purchase price (at the end of Interest rate 5.00% term) $386,362 Amortization years 30 Target down payment $38,636 10% Allowable mortgage amount $347,725.69 Client initial deposit $10,000 monthly option % down 10% premium required $795 Value of the house that can be bought at end of lease term (3 years) $ 386,361.87 monthly market rent $1,800 Appreciation rate of the house 5% monthly RTO bonus $200 current value of house for Rent-to-own $ 333,753.91 monthly RTO payment $2,395Tuesday, July 24, 2012 20
    21. 21. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Explaining RTO SimplifiedTuesday, July 24, 2012 21
    22. 22. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Explaining RTO SimplifiedTuesday, July 24, 2012 22
    23. 23. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Explaining RTO SimplifiedTuesday, July 24, 2012 23
    24. 24. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Explaining RTO SimplifiedTuesday, July 24, 2012 24
    25. 25. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Explaining RTO SimplifiedTuesday, July 24, 2012 25
    26. 26. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Where & How to find investors• Who you know is important; Who knows you is critical• Networking – Physically attending PREIG Canada network meetings/events – Social media – Facebook, Twitter, Linkedin – Need to show up. Need to be consistent. – Establish relationship with “Center of influence”• Referral, Referral, Referral – Current investors – Real Estate agent, Mortgage agent – Hair dresser/cell phone story – Having lunch
    27. 27. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring What to do with potential investors?• Be passionate with your investment strategy• Establish rapport• Share the stories of your project• Tell them enough to generate interest, not enough to make decision. Decisions are for follow-up meetings• Focus on helping them to understand
    28. 28. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Feasibility Analysis Lease Option Feasibility Analysis: Dash Board Lease Term: 3-Year Investor Tenant Tenant Monthly Result Matrix DCR Profit % Down Payment Current Value 1.36 70% 10.3% $ 2,080 Target 1.10 60% 10% $ 2,000 Description of the property: 1930 Ashwood Type of Property: Free Hold Monthly Market Current Purchase Price: $265,000 Rent: $1,600 Other Ont. Land transfer tax City $2,450 Rehab cost/setup cost: $2,000 Avg. Annual Closing legal fee $2,500 Appreciation 5.0% Assignment fee $7,000 Adjusted Cost base: $278,950 Annual property tax: $3,500 Annual After Repair Market Value: $290,000 Insurance: $1,000 Selling commission: 4.50% $13,050 Financing: Initial Cash 1st Mortgage Investment $66,950 1st Mortgage Amount 80% $212,000 DCR(Free Hold) 1.36 Debt coverage ratio Interest rate 4.00% # of Amortization Years 30 2nd Mortgage RRSP 2nd Mortgage Amount $0 2nd Mortgage Interest rate 14% Total Mortgage $212,000 Lease Option Arrangement: Note: Input field are highlighted in Initial Down Payment $10,000 yellow Monthly Rent (% of avg. rent) 100% $1,600 Monthly Option Premium (% of avg. rent) 30% $480 Monthly Condo Fee $270 Tenant Total Monthly payment $2,080 Monthly Option Bonus $200 (extra money to credit to Leasees downpayment) Tenants Preferred Length of Lease (# of Year) 3Tuesday, July 24, 2012 Copyright 2012 – Rent to Own Specialist Canada – All Rights Reserved 28
    29. 29. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Priceless Gifts Receive your Search for GIFTS the clues Go to www.WorldWealthBuilders.com Copyright 2010 – World Wealth Builders – All Rights 297/24/2012 Reserved
    30. 30. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Good, Bad & Ugly• Good cases: Guelph St, Oprington, Ecclestone• Bad: – City Place – Bad to Great – Wexford – Bad to Good, Thank God! – Hallen Rd – Bad to Not bad• Ugly: – Hansen Rd – Learning experience – Bramalea Rd – Turn Ugly to beauty – Bryant Crt – Ugly recovering in progressTuesday, July 24, 2012 30
    31. 31. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring The “Bag of Tricks” or Apprenticeship• We still have many more tools in our “Bag of Tricks” like how to pull a RTO project together and how to run the project to ensure that we are making money at the end.• What else you may want to know: – How to choose a house for RTO? – How to negotiate the best deal from seller? – How to save money in renovation? – How to deal with tenant issues? – How to deal with investors? – How to structure a RTO joint venture ? (make money now, make money along the way, and make money at the end) – How to sell the property to RTO tenant at the end of the term?.....
    32. 32. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring How to get the rest?• You got a lot of useful tools today, you can use right away• World Wealth Builders is offering a full day training course to provide you all the tools• It will be in September, 2012 in Toronto• The cost is $1995 per person. Two can attend together at $2995.• After you attend the course, you will know all of our bag of tricks. We may even partner with you in projects…. Copyright 2012 – Rent to Own Specialist Canada – All Rights Reserved 32Tuesday, July 24, 2012
    33. 33. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Today is your lucky day!• Further discount from the price – twist the arm..but never break it!• Most of you can attend the course for half price Provided you buy the lunch for me• You can make money with us now – For every person you refer to attend and pay for the course, you will get $100 cash – When you refer 4 pay attendee, you attend the course as complimentaryTuesday, July 24, 2012 Copyright 2012 – Rent to Own Specialist Canada – All Rights Reserved 33
    34. 34. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Lease option Rent to own Canadian Real Estate Apprenticeship – LIVE Tuition fee $2495.00 plus HSTWorldWealthBuilders.com/live Copyright 2011 – World Wealth Builders – All Rights Reserved
    35. 35. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Lease option Rent to own Canadian Real Estate Apprenticeship – LIVE Today Special $995 plus HST Dates: September 2012WorldWealthBuilders.com/live Copyright 2011 – World Wealth Builders – All Rights Reserved
    36. 36. Lease Option Rent To Own Seminar Real Estate Investors Education & MentoringMentoring & Coaching for Real Estate Investors Book an appointment for 30 minute Complimentary mentoring/coaching now!
    37. 37. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Copyright 2010 – World Wealth Builders – All RightsTuesday, July 24, 2012 Reserved 39
    38. 38. Lease Option Rent To Own Seminar Real Estate Investors Education & Mentoring Thank You!www.WorldWealthBuilders.com Copyright 2011 – World Wealth Builders – All Rights Reserved

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