Rich Dad Education – Real Estate Blog

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Rich Dad Education Investing Series – Lease Options

Lease Options Investing

Lease Options

This is the first article in a Rich Dad Education investing series on lease options. Rich Dad Education offers elite trainings in numerous real estate investing areas, lease options being one of them. Rich Dad Education’s Lease Option elite training focuses on a strategy that is very appealing to investors who want to buy properties without using any of their personal cash or credit. Because lease options give investors so much capital flexibility, it is not hard to see why it has become one of the more popular Rich Dad Education elite trainings offered.

Future articles in this Rich Dad Education series will go into specifics on how lease options work, the different type of lease options that are available, and a step-by-step checklist on executing lease options. Before this series dives into the heart of lease options, a couple of investing concepts will be discussed that can be applied in numerous real estate investing areas. The first of these is the concept of the motivated seller.

Motivated Sellers

There is a common saying among real estate investors, “you make your profit when you buy the property.” Whether you are attempting to buy a property to rehab and turn for a quick profit or acquiring a future rental property, the most important decision you make is often at the point of purchase. While there are several techniques that can help you calculate what your offer should be based on (these techniques will be discussed in future articles), you also have a precious commodity that you cannot waste―the commodity of time. Maximizing one’s time is at the heart of the Rich Dad Education philosophy and a savvy real estate investor should always be looking for ways to maximize how they spend their time. Being able to identify motivated sellers is one way Rich Dad Education students can do just that.

Motivated sellers are defined in numerous ways by real estate investors. For simplicity’s sake, the primary attribute you need to determine in order to classify the seller as motivated is whether they need to sell their home or whether they simply want to. A person that is transferring to another state for work or who is risking losing their home needs to sell. A person who is looking to simply upgrade to another home simply wants to sell. Being able to quickly determine the sellers true motivation early will save you a tremendous amount of time as you won’t spend your time trying to negotiate a deal that simply is not beneficial to either party.

As you search for properties, you will likely run across advertisements and listings that catch your eye. Some of these might even include the phrase motivated sellers as part of the advertising. Whether they are or not can be determined by a simple phone call. Do not spend your time investigating any further until you have made a call to determine whether the seller is motivated or not. This can be done in a few minutes and can save hours of traveling and investigating the property further just to eventually find out that the seller truly isn’t motivated to sell.

The Initial Phone Call

You will want to exhibit tact and professionalism during your phone call while gathering the information you are looking for. The lease option can create a win-win situation for both parties, but it will likely be a foreign concept to the seller so it is important to first build rapport with the seller while determining what their motivation for selling is. Your ultimate goal with this call is to determine why they are selling their home―there will be time to introduce options that you have for them after this determination is made.

A few tips for this phone call:

  • Be sure that it is a time that the seller is available to talk. If they are not available or it is not a good time, schedule a time you can contact them later.
  • Inform them that you are a real estate investor―you want to build trust with the prospective seller. If they are truly motivated, then this likely will not matter to them.
  • Verify the seller’s asking price, property address, number of bedrooms and baths, square footage, and normal questions you would inquire about on any property.
  • At an appropriate time in the conversation, ask them why they are looking to move. If done naturally at an appropriate time, then you are likely to get an honest and open answer.

There are numerous situations in life that will create true need on the part of the seller to sell. When you locate a motivated seller, having multiple options that can create a win-win situation for you and the seller enhance your ability to get the deal done. Lease options can be a powerful tool in your arsenal in this type of situation. Future articles in this Rich Dad Education investing series will discuss how you present the lease option to motivated sellers.

 

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3 responses to “Rich Dad Education Investing Series – Lease Options

  1. desmoinesgreen April 18, 2013 at 1:23 pm

    Reblogged this on desmoinesgreen's Blog.

  2. Pingback: Rich Dad Education Investing Series – Lease Option Strategy | Rich Dad Education - Real Estate Blog

  3. Pingback: Rich Dad Education Investing Series – Lease Options: The Initial Visit | Rich Dad Education - Real Estate Blog

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