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seller wants to do a traditional lease option. not EHT.

Home Forums General EHTrust/EHT Topics and Creative Real Estate Financing seller wants to do a traditional lease option. not EHT.

This topic contains 14 replies, has 0 voices, and was last updated by Avatar of areyes areyes 9 years, 8 months ago.

Viewing 15 posts - 1 through 15 (of 16 total)
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  • #6111
    Avatar of areyes
    areyes
    Member

    so ive come across a free and clear property and the owner insists on doing the traditional lease option using rent credits, non refundable option consideration, etc. the owner is a no nonsense type of guy and simple. he doesnt want to deal with or hear anything about the EHT. he’s allowing me to market his property to find my own tenant/buyer and giving me half of the option consideration and then wants me out of the picture when they close. some call this cooperative lease option agreements. so its pretty much getting an option signed with the seller and assigning my option position to the tenant/buyer for a fee. he doesnt want to use my NEO or any other EHT documentation but rather have an attorney write up the traditional lease and option agreements.

    so im just rolling with it using tim mai’s flex option agreement which is just a one page non exclusive option agreement.

    then it got me thinking why dont i just use this one page flex option agreement for all the sellers and when i secure my own RB, i just go straight to the Appendix 1 trust purchase offer?

    this will save me a lot of time of doing Q&A about the EHT if im able to just get the seller to sign the one page form. i can do the Q&A about the EHT when we’re ready to setup the EHT documentation.

    yes i already know the risks and pitfalls of lease options. :wink:

    thoughts? would you walk away?

    #31399

    Show him my story and then ask him to tell you why he would want to do something as stupid as I did.

    #31400
    Avatar of corkhorner
    corkhorner
    Participant

    Alvin, my friend Ed Garcia says “some deals need to season”…..

    Thought: Maybe we need an ebook on case law of lease options that went to court and cost the owner and arm, 2 legs, the ‘other parts’ etc.

    Hey! Homerun….’we’ could sell it!

    I am quite sure there are thousands that went to court over “you can’t evict me because you are SELLING me the property”. [equitable interest]

    How to find/research them I don’t know.

    Maybe DocMeister knows how to explore case law?

    Ironically, those who have never been stung have not had a professional tenant take them ‘down’.

    c h

    #31401
    Avatar of mtnwizard49
    mtnwizard49
    Member

    In the mid 80s I lived in a house as the Lessee and made all payments on time. The day after I made the final payment, some guy rang my doorbell and informed me that the Owner had just sold him the house.

    I had an attorney who argued that I had an equitable interest and the first right to purchase. The landlord was a local contractor for 40 years who played golf with all the local judges. I lost the case. The judge didn’t want to hear a thing about equitable interest and even joked with the Landlord. He shot down my attorney at every turn, was nasty and belligerent, and we never had a chance.

    Welcome to American justice.

    #31402
    Avatar of corkhorner
    corkhorner
    Participant

    Good one, Dr Wiz;
    The moral is contractors and judges make good bed partners? :roll:

    Or, perhaps your attorney didn’t present case law regarding the laws around equitable inerest? I wonder what would have happened if your lawyer had presented case law precedence?

    Just wundrin;

    c h

    ps
    btw Dr Gary, been to any ‘good’ sweat lodges lately where atendees leave in a black bag?

    #31403
    Avatar of mtnwizard49
    mtnwizard49
    Member

    No, Cork — he quoted Shakespeare.

    #31404
    Avatar of corkhorner
    corkhorner
    Participant

    In oher words, Doctser,

    all the world’s a stage, especially for lawyers?

    Like that?

    c h

    #31405
    Avatar of corkhorner
    corkhorner
    Participant

    Sounds like to me to decide if via the Real Property acquisition an equitable interest exists . Then to figure out if the parties could/can join in creating an EHT for mutual benefis.
    I have no knowledge of Tim Mai’s system and what equitable interest evolves.

    I don’ see where licensing comes into play where an equity position exists.

    The caveat here is that I am neither a lawyer, agent or broker.,

    c h

    #31406
    Avatar of areyes
    areyes
    Member

    Yes that one page flex option agreement deals with real property and equitable interest. I’d want to use it because it’s just one page and I don’t have to explain a lot of things to the seller in regards to the EHT up front. Remember my purpose is to utilize the EHT once I secure a qualified RB. I can go over the EHT with the seller during my marketing period to give the bits and pieces. So once when I secure my RB, I open escrow to structure the EHT. Instead of using a real estate purchase agreement, I will use the Appendix 1/Trust Purchase Offer. So technically I will bypass the (NEO) Non Exclusive Option Agreement to Acquire an Interest in their land trust.

    The purpose is to simply use one page option agreements and get more properties under contract using the “flex option” as opposed to the NEO.

    #31407
    Avatar of areyes
    areyes
    Member

    I remember having a talk with Jim Pasquini long time ago, and he said that we can bypass the NEO if we already have a buyer and seller ready to go into an EHT. There’s no point in using a 30-90 day NEO when we already have all the parties in place. You just sign the Appendix 1 and set up the EHT without using the NEO at all.

    How would this be any different than using a one page flex option for 90 days and Appendix 1 to simulate the same end result of closing with the EHT?

    Wouldnt this also be the same if property was listed on the MLS with the intent to use the EHT to structured the lease options or wraps?

    I would probably have to cancel the flex option agreement or MLS listing once when a qualified RB is located. This is how I would transfer from real property to personal property by mutually cancelling out the flex option or MLS listing.

    #31408

    I don’t know what you’re saying but I never have to explain an EHTrust, period. We get the property under contract via the NEO or in some cases go right to a Simple Trust. If the homeowner is going to stay in the property the and only then would we create a Lease and Occupancy Agreement and convert the simple trust to an EHTrust. Why explain an EHTrust if you’re never going to use one. A Simple Trust is a “simple” trust. What is there to explain?

    Your offer should “TELL” them what you are going to do, NOT ASK or EXPLAIN to them what you are going to do.

    “Mr/Mrs Seller, were going to place your property in an escrow or trust in your name. You are going to make us a beneficiary of the trust to protect our interest along with yours. When the lien on your property is released we will agree to sell the property and split any of the proceeds 51/49, Fair Enough?”

    That’s it!!!

    #31409
    Avatar of areyes
    areyes
    Member

    when the sellers ask those questions about land trusts, options, trust purchase offer, beneficiaries, trustees, cover letters, etc., that’s my Q&A session that i have to explain to them. isnt that the EHT process of getting a NEO signed?

    that’s one of my point using the flex option. i dont have to explain the EHT or having the long Q&A session up front.

    id rather shoot now and answer questions later.

    i get my own RB, and then tell the seller and RB im going to use the EHT to close. there might be times where i dont even have to talk about the EHT until i secure my own RB. that will save me a lot more time. if the seller doesnt want to close with the EHT, too bad, we move the RB somewhere else

    scott, my goal is to use the EHT, no doubt about it, but without the 5 page NEO. i can get the same end result of a 90 day non exclusive option agreement all on one flex option page and without having to do Q&A on land trusts.

    the only times where i dont have to explain or do a Q&A on EHT or land trusts, are fellow NARS members since they already know what we do. ive never come across a seller who’s NOT a NARS member who signed my NEO without asking questions.

    #31410
    Avatar of areyes
    areyes
    Member

    @Scott_L._Moyes wrote:

    Your offer should “TELL” them what you are going to do, NOT ASK or EXPLAIN to them what you are going to do.

    “Mr/Mrs Seller, were going to place your property in an escrow or trust in your name. You are going to make us a beneficiary of the trust to protect our interest along with yours. When the lien on your property is released we will agree to sell the property and split any of the proceeds 51/49, Fair Enough?”

    That’s it!!!

    I’ve done that numerous times where I tell them this is what I’m going to do. They will always come back with a boat load of questions and that’s where I have to explain to them what it means in a 3rd grade language.

    Explaining is the same thing as answering questions and objections about what we are going to do. I tell them to highlight any part of our preliminary documentation (terms of proposal, NEO, purchase offer), and I will write back to them in writing. This is explaining the EHT is it not?

    I’ve used your cover letter and they have questions about trusts and beneficiaries. I have to explain in order to get them to sign.

    I do get NEO’s signed but I just think using the one page agreement is faster.

    I will test this and post how many signatures I can get from sellers who are willing to do a lease to own.

    #31411
    Avatar of areyes
    areyes
    Member

    i say yes.

    dont forget, if you’re ready to go with both RB and SB, then the Trust Purchase Offer/Appendix 1 is purchasing beneficial interest right away without the NEED for the NEO

    if you’re dealing with a listing agent via the EHT, the agent will want to write it up with CAR forms if they were to put it on the MLS while the investor has the unrecorded NEO with the seller. the listing agent and investor both have to be on the same page though. ive had a few agents that were interested and i just told them that they’d have to cancel their listing once when a qualified RB comes into play. this was taught by Pasquini long time ago. they’ll still get paid in escrow but they’d have to cancel the listing. id say that it goes same with other real estate options where you can cancel or withdraw the option first and then proceed with the EHT transaction.

    #31412

    Alan, I’m new and lost. What is tim mai’s flex option agreement and where can I see a sample? I like keeping simple, but got lost in this discussion.

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