Storage Wins EP414: How To Buy Pretty Houses For FULL PRICE And Still Make A Killer Profit
Todd Foster has been in real estate since 2010 and was able to leave his full-time job in 2012. He learned under Ron LeGrand, and is a master at creative lease options (and setting up deal structures with pretty houses in good neighborhoods). He believes there's so much more opportunity in this space than in the distressed housing space. He shares a couple of case studies on how creative leasing can be an amazing avenue for you and your business. They also answer a ton of listener questions at the end!
Key Takeaways:
- Todd specializes in something called the 'Pre-house buying model.'
- Can't get the property at the right price? No deal? Not necessarily true.
- Todd shares a bit on how he got into real estate. He was able to leave his job in 2012 and hasn't looked back since!
- There are more pretty homes available than there are distressed homes and that means you can do a lot more with it!
- Why does Todd love to use lease options to sell his property?
- You don't need money or credit to get started in these deals.
- One of Todd's tenants had a really hard time finding someone to rent to her because of a foreclosure ding on her credit.
- Todd showcases some case studies on how now you can structure your deals creatively.
- The sellers couldn't get their house sold for 320K, but Todd was able to sell it at 329K because they provided a lease with an option to buy.
- What percentage of tenant buyers actually end up buying the property?
- Todd shares another case study to help the seller pay off his loan while still owning the property.
- Does Todd use a loan servicing company?
- It's important to be flexible with the tenant buyer based on their financial situation.
- How does Todd navigate the 'due on sale' clause?
- Todd uses land trusts to help protect the seller.
- The next case study is about how to navigate an over leveraged home.
- A tenant-buyer paid Todd to take over a contract that was 17K underwater. How was this a good deal for the buyer?
- How do you talk to the seller about doing these types of deals?
- Has a seller tried to void the agreement later on?
- How is it different from vetting a tenant-buyer vs. a regular buyer?
- The tenant-buyer is the one who would ultimately need to qualify for the loan to purchase the home.
- It's important the seller has a full disclosure on what's happening with their home. Communication is key.
- Ethnically, Todd has to make sure that people will be able to cash out in the homes they're going into. He's not going to set people up to fail.
- How does Todd find homes that have expired listings?
- How does Todd handle the release of the deed without triggering due on sale?
- How does Todd handle a major repair on the property?
- Remember it's quality over quantity. Todd shares how he structures his team.
Mentioned in This Episode:
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.Tweetables:
"The biggest thing we're looking for is sellers that are willing to provide us time to pay them off in full. Time is what makes these deals work"
"You have to do the right thing by the buyer. If they just filed for bankruptcy, they're going to need a couple of years to get qualified, so putting them on a one lease option is setting them up for failure."
"We ask questions to the seller and to really see if they're open to some kind of creative deal. If they want to do it, great."
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