I had bought Bill Bronchick’s Big Profits with Lease Options and had been procrastinating about getting started. One day in Home Depot this person I had not seen in quite a while asked me how I was and if I was still in the contracting (fence and deck) business. I responded that I was, but I had also started investing in real estate. She says that I should buy her house.
Well of course I started pitching the lease option version to her, and she said to call her in a couple of days. When I called her she said that she would wait a bit before she would consider my offer, but her friend had a house he was wanting to sell.
I call her friend and started the lease option pitch. First thing he says is when do I get my money? I explained in about a year or so when my tenant exercised their option. “Oh, no,” he says. “I need my money sooner than that.” I ask what the house was worth, and he says he just got an appraisal in the mail for $71,000 and all he wanted was to payoff the underlying $44,000 mortgage and pocket $18,000 ($62,000 total).
I knew that the appraisal he had gotten in the mail was a tax appraisal and they are usually low in today’s market. The homes in that area were selling for the low to mid eighties. I told him that I could do a straight option with him if he could give me 75 days since this was two weeks before Christmas. “When can we meet? Will tomorrow be good?” “Sure,” he said.
I gave him ten dollars consideration and had the contract notarized at his bank and then proceeded to market by placing a sign in the yard reading:
For Sale By Owner
“No Bank Qualifying”
xxx-xxx-xxxx
The phone started ringing immediately. The first thing they would ask was to tell them about the no qualifying. I would explain to them that I had a mortgage broker to qualify them through and that this took far less red tape than bank qualifying. I would then give them my broker’s phone number. I asked how much they could pay down and sort of pre-qualified them prior to showing the house and tried to set up several appointments at the same time.
The first person to show said that it was nice and left. I had shown it a few more times when she called back and said she wanted it and she had her own financing. The rest is history, and I pocketed $16,400. I think I will take that $16K and put it into a rehab I picked up for $4,500, but that’s another success story. Thanks to everyone here on CRE Online that helped me through this one! Off to the next one!