What if you could turn your dead real estate investing leads into dollars to generate much more profit for your business?
If you are paying money every month to generate REI leads (real estate investing) for your real estate investing business you owe it to yourself to maximize your returns by exploring more than one or two options for purchasing.
Most investors just make a straight cash offer that makes sense for a wholesale deal or flip deal.
So many potential deals are thrown into the trash because the numbers didn’t meet their criteria for a straight cash offer purchase to wholesale or fix and flip.
By tossing these REI leads into the trash you are really missing huge opportunities to add to your profits each and every month.
Let me explain.
By getting creative and having knowledge of other real estate investing strategies you can turn many of these REI leads into great deals. Other investing strategies such as:
Sandwich Lease Options
Real Estate Listings
When all these options fail you can always pass the lead on to a real estate agent for them to list the home. If you are not licensed they may not be able to pay you a “Referral Fee” but you can call it something else such as a marketing fee. A fair amount would be 25% of their sales commission.
Let’s take a little closer look into the other real estate investing strategies above to see how you may be able to use them in your business when a straight cash offer doesn’t work.
Subject To means buying the property subject to it’s existing financing. You are not assuming the financing though. The current owner stays on the loan but they deed the home over to you. This strategy works great when there is little to no equity in the home.
If the seller has very little to no equity, listing the home on the market is not an option because they will have to come out of pocket just to pay the real estate commissions and closing costs.
You can give the seller some money to help with moving costs and possibly a little for some of their equity if the numbers make sense. Once the deed is in your name you can rent the home to generate a monthly cash flow as long as the total payment is less than the monthly rent you will be collecting.
This strategy will only work though when there is true motivation to sell the home.
To learn more about this strategy you can go to my Subject To blog post here http://bit.ly/1UmYoNE
Sandwich Lease Options
When the seller does not feel comfortable with a Subject To you can try for a sandwich lease option.
With this strategy you will sign a rent to own agreement (AKA lease w/ option to purchase) with the seller. You will then do the same with a tenant buyer who intends to live in the home and eventually purchase.
When this strategy is properly set up you will have a monthly cash flow from the difference of the rental amount you negotiated with the seller and the amount of rent you are charging the tenant buyer.
You will collect a non-refundable option deposit from the tenant buyer which is to be applied towards the purchase of the home if they exercise their option at the end of the term.
Lastly, you will also have a spread between the purchase price you negotiated with the seller and the one you agreed on with the tenant buyer. The difference is yours to keep.
This strategy is best used with homes in good to great condition and in more middle class or higher neighborhoods.
Seller financing is simply when the seller carries back a portion of what you owe them in the form of a loan. They are essentially acting like a bank.
The great aspect of seller financing is that the sky is the limit on how you can structure it. You can get very creative.
By a seller carrying back financing they benefit with receiving more on their money than if they just placed it in the bank.
This strategy can work for rental buy and holds, wholesale deals and even fix and flips.
For fix and flips you can even partner with a seller. If you are unable to come to an agreement on a straight cash price that makes sense for a flip, you may be able to entice them with making some extra cash if they keep the loan in their name while you complete the rehab and sell. This would mean that you don’t have to find the capital for the purchase of the home, except for the repair costs.
This agreement gives you the right, not the obligation, to purchase a property for an agreed upon price during an agreed upon time frame.
Once you have a signed option agreement the seller is obligated to sell but you are not obligated to buy. This really minimizes your risk.
This type of an agreement can be used to control all types of real estate.
If the seller’s bottom line doesn’t quite make sense for you for a wholesale or flip, but it is close, you can get an option to purchase at that price. Next you can pass it by other investors in the area to see if any takers.
We all have slightly different criteria when it comes to investment properties. Some investors are seeking smaller margins than you and it may be a great fit for them. You could wholesale the deal to them and make a few thousand or so on it.
You can learn more about Options in this blog post http://bit.ly/22ZrE0s
You now have 5 additional ways that you can generate income off of the REI leads that you are paying for. Before you toss any of your REI leads to the side ask yourself this one question; Is there any other way I can make money on this lead? Once this becomes a habit for you, you will notice that your profits increase a great deal. You will start to close more deals.
I hope that this post was very helpful to you. If it was, please share with someone who you think may benefit from it.
Here’s to your success!!!