[Jackie Lange]

Jackie Lange

This is a 2 bedroom, 2 bath fully furnished. $550 is my price for 3 years, with right to renew.
I can rent for $750

The owner is a 70+ landlord who is in bad health and cannot manage the property anymore but desperately needs the guaranteed cash flow. win win for both of us.

[Mike Gibson]

Mike Gibson

Jackie, why did you do a master lease on this instead of seller financing, since it seems that the main thing the owners is interested in is cash flow?

[Jackie Lange]

Jackie Lange

Baby steps! When talking to the owner it is obvious that they are still very emotionally attached to the property. That means they would be less likely to sell. So, it is better to not even bring it up. Instead, I did a master lease. I will prove to the owner that they will get their payments on time. In 6-12 months I will bring up seller financing.

It is the owner’s responsibility to fix and pay for anything that breaks under the current arrangement. But if it breaks, I can bring up buying with seller financing at that time and say I will pay for the repair. TIMING is everything!

Sometimes it is better to start with a master lease. It is a good way to get your foot in the door for seller financing.

[Jackie Lange]

Jackie Lange

If the seller were not emotionally attached to the properties, which you can only determine after talking to them, then I would go straight for buying with seller financing.

There would no opportunity to buy subject-to in Panama as 90% of all homes are free and clear

[Mike Gibson]

Mike Gibson

So, was it your conversation with him that enabled you able to make the determination that he was still attached to the house and the cash flow, as opposed to just the cash flow?

[Jackie Lange]

Jackie Lange

Exactly, a conversation with the owner of the property is the ONLY way you can determine their true needs and motivation. Only then should you make an offer which will fit their needs and yours.

With this property, the owner had previously hired property managers who took advantage of her and did not pay rent. She emphasized that she needed reliable and regular cash flow to pay her health insurance

So, offering a performance lease would not have solved her problem
She needed guaranteed payments every month

Offering to buy her house with seller financing would have given her regular monthly payments
but because she just got burned by an unethical property manager , I decided it would be better
to build trust first.

When you listen, really listen to sellers/owners they will tell you want they will and will not do.
It is better to do that instead of trying to get them to fit in to the technique or strategy that YOU want to use.

You will get a LOT more Yeses if you talk to sellers about their needs and problems… before yo start making offers.

[Mike Weiss]

Mike Weiss

This post is a great lesson.
Thanks Jackie

[Sue Bania]

Sue Bania

Also, when the owner is ready to emotionally let go of the property it’s a good time for purchase with owner financing, as Jackie said. In the meantime I have had success with master lease owners to tell them that I would like an option to buy the house. I already have the right to sub-rent. Why not let me be your possible buyer on down the line. Work out a lease-option deal with the owner and then lease-option the house to a tenant-buyer. Do a sandwich lease-option. Just my 2 cents. John in Sarasota, Fl. http://www.AuroraPropertyFlorida.com I hope it’s okay to put my web address there. Take care and good luck. John