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"Option fee" objection

This topic contains 12 replies, has 0 voices, and was last updated by Avatar of homesavers NULL 12 years, 1 month ago.

Viewing 14 posts - 1 through 14 (of 14 total)
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  • #5454
    Avatar of homesavers
    NULL
    Member

    You forget Gross vs. Net. If the resident defaults then the contingency is non refundable. Tell them they (the resident) is 100 percent responsible for all maintenance. If they default the contingency fund is used to evict them and clean the place up. I think they are “smoking” you. Which means they are throwing a smoke screen to throw you off from the real reason. That is they know most people will not exercise the option so they can pocket the non-refundable option consideration. If I was a Lawyer I would have so much fun with that one by going after the seller that set up these bogus lease options that burnt Scott Moyes in his early Arizona days. When he was renting to the Apache’. :D

    #28516
    Avatar of jerry carey
    jerry carey
    Member

    In addition to what Homesavers said … tell them there is “no down-payment”, but there is a contigency fund that will assure that your monthly payment gets paid on time and that the Resident beneficiary makes a contribution to the trust from which any and all damages will be deducted! Also, you advertised for a lease payment of $xxx.xx dollars a month … suppose instead of a down-payment … We pay you $xxx.xx dollars a month plus a $100.00 or $200.00? Woud that satisfy your needs?

    Remember … everything is negotiable :!:

    Jerry Carey

    #28517
    Avatar of getsmart
    getsmart
    Member

    Jerry how can you assure that the mortgage gets paid if the rb moves out. you can’t make any guarantees or else you will be responsible and it would be more of an informal assumption on your part.

    #28518
    Avatar of areyes
    areyes
    Member

    A contingency fund that’s established with the collection servicing company would assure the homeowner or else the property reverts back to the homeowner without having to foreclose on the RB.

    #28519
    Avatar of getsmart
    getsmart
    Member

    with the way its worded the seller is assured payments, they could care less about receiving the property back, they want to be done with the hassles and getting the propety back is a hassle. some will go out and get a blood thirsty attorney to rattle you up. i am just saying be careful what you say.

    #28520
    Avatar of isaac duenas
    isaac duenas
    Member

    @GetSmart wrote:

    with the way its worded the seller is assured payments, they could care less about receiving the property back, they want to be done with the hassles and getting the propety back is a hassle. some will go out and get a blood thirsty attorney to rattle you up. i am just saying be careful what you say.

    I believe until this day we haven’t had an issue with these wording.
    So we might be doing something right.

    #28521
    Avatar of getsmart
    getsmart
    Member

    anythings possible. :shock:

    #28522
    Avatar of kevinscott
    Kevin Scott
    Member

    This seller seems MORE CONCERNED about being able to put money in HIS POCKET in the event of default.

    This seller is not exactly ENTHUSED that someone (investor) is comming to help relieve his woes.

    Personally, I’d move on to the next seller. It’s hard for me to know for sure, without hearing sellers tone of voice, and addition side/snide comments, and grunts he makes. I’m thinking that ACTIVE LISTENING SKILLS is part of the skill set needed by any smart investor.

    #28523
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @KevinScott wrote:

    I’m thinking that ACTIVE LISTENING SKILLS is part of the skill set needed by any smart investor.

    The Four Laws of Success…

    1. Show Up – for me its, making an offer every day. If that means I need to make 25 phone calls to make just one offer, so be it.

    2. Be Honest – Goes without explaination

    3. PAY ATTENTION / LISTEN – This seems to be the hardest thing to do for most of you. Ask a “Closing Question” and SHUT UP! The first one to speaks loses. In other words, before you verbally throw up all over them with everything you know about Creative Real Estate and Land Trusts, LISTEN TO THEIR RESPONSE FIRST. If they don’t say anything, then just sit there in silence. Even if all they say is, “are you still there”, you win.

    4. Stay Unassociated with the Outcome – There is Power In NOT Caring!

    #28524
    Avatar of jerry carey
    jerry carey
    Member

    Isaac asked:

    “What about the down payment? Then of course I let them know that there will be 2-3 advance payments at all times. At this point they usually tell me that they want this contingency fund as a non-refundable fee (like an option fee).

    I said:

    suppose instead of a down-payment … We pay you $xxx.xx dollars a month plus a $100.00 or $200.00? Woud that satisfy your needs?

    GetSmart sais:

    with the way its worded the seller is assured payments, they could care less about receiving the property back, they want to be done with the hassles and getting the propety back is a hassle. some will go out and get a blood thirsty attorney to rattle you up. i am just saying be careful what you say.

    How do you figure changing the amount of the RB’s monthly payment to a figure $100-$200 higher makes it any more assured than the lower amount?

    I think a lot of posters and readers on this board do not understand what happens when a Resident Beneficiary defaults! A default is usually for not making the payments, but can be for breaking other terms of their occupancy agreement such as not maintaining the property! For either or any breach of the agreement … they can be evicted … asssesed a $2,000. default fee and be responsible for paying any expenses of their replacement such as additional monthly payments, advertisng, etc., which are all deducted from their original contribution made to the trust at it’s origination! If there is any depletion of the Contingency fund … it’s the Investor Beneficiary’s financial responsibility to pay these contributions which are added to thier contribution, before funding disbursement at termination of the trust with a replacement Resident Beneficiary! While the Investor Beneficiary probably does not have a Legal liability to cover these Contingency Fund deficiencies … it certainly make moral and financial sense to do so … since the IB got most of the proceeds from the defaulting RB’s original contribution and is getting the second initial contribution proceeds from the new RB … Double Dipping on the same property!

    Jerry Carey

    #28525
    Avatar of homesavers
    NULL
    Member

    @KevinScott wrote:

    …Personally, I’d move on to the next seller. …

    This seems to be a reoccuring theme here. Although I do agree you should move on and say NEXT!. However, when you do move on to the next seller ask youself this question, Did I approach this correctly?

    I am telling you right now you don’t have to say NEXT! to the right seller. They need us. There is no logical reason for them to turn our offer down. NONE! I am not going to go through 100 more sellers and get turned down when I know that I am only offering them an Non-Exclusive offer. You don’t need to make hundreds of calls to figure this out.

    What you need to be concerned with is building relationships-one step at a time. I think calling seller after seller until you get a Yes is a waste of time. You should be getting a Yes most of the time if you have the right message. I get a Yes 50 percent of the time but I get no action. You have to get the Seller to take action.

    #28526
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @homesavers wrote:

    What you need to be concerned with is building relationships-one step at a time.

    From your posts in the Loan Mod thread I didn’t think you wanted the responsibility of building a relationship.

    #28527
    Avatar of homesavers
    NULL
    Member

    @Scott_L._Moyes wrote:

    @homesavers wrote:
    What you need to be concerned with is building relationships-one step at a time.

    From your posts in the Loan Mod thread I didn’t think you wanted the responsibility of building a relationship.

    Look at the last sentence, Scott. You have to get the Seller to take action. You can’t build a relationship with someone that will not take action, right?
    I didn’t mean to imply that I am not going to do anything and have deals just got dropped in my lap. What I mean is you need to figure out what do when supposed motivated owners do nothing. Should you chase them for paperwork and signatures or should they be chasing you. I think the later is better don’t you? How do you get them to chase you? If you are a solution to their problem they will find you. So I would reiterate here calling seller after seller until you get a Yes will burn down most people in this business. Positioning yourself as their solution is what you need to solve this problem of NEXT! Change from “some will, some won’t so what” to “All will, All have a problem, All solutions are with you” Sign them all!

    #28528
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @homesavers wrote:

    Look at the last sentence, Scott. You have to get the Seller to take action. You can’t build a relationship with someone that will not take action, right?

    The Seller did take action, they said NO!

    NEXT!

Viewing 14 posts - 1 through 14 (of 14 total)

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