The other strategy that I use when there is not enough equity in a deal to do a SLO, is to pursue a CLO.
In this strategy – I am working towards getting the Seller full asking price for their property, with the goal of getting paid a 3.5% or $5,000 ‘assignment’ fee from a qualified Tenant/Buyer (TB).
In this strategy – we are not concerned about getting equity in the deal, but look to bring a TB to the Seller, and getting paid from their option fee, which is 3.5% or $5,000 – whichever is greater.
The premise behind this strategy, as well as with SLO’s, is that you have built up a ‘Buyers List’ through ongoing marketing efforts (free to do by the way), and when you have a Seller who is willing to lease-option their property, you can ‘plug in’ a qualified TB and get paid a onetime assignment fee from the TB’s Option Fee (loosely called a ‘down payment’).
You do not get paid from the Seller, but from the TB, and thus, our services are ‘free’ to Sellers.
Conclusion:
When analyzing a deal – first of all remember – it’s important to stick with your market criteria and not to ‘force’ any deals that you may later regret. Believe me – I’ve done it, and it’s not something you want to bear the burden of.
Secondly – don’t worry if there is not equity in a particular deal, because you can always move in the direction of a Cooperative Lease Option, have a nice payday, and go on to the next.
If you have any questions about when to do a Sandwich Lease Option vs. a Cooperative Lease Option, and the specifics behind these strategies, be sure to be part of my coaching program which is the best, most effective, and the least expensive of any method of coaching out there – to get you the fastest return on your investment – don’t hesitate – contact me TODAY to get plugged in!
Finally, as we instruct every student nowadays, always work with, and close your deals, through a qualified local real estate attorney and/or a title company. That protects you, and increases the comfort level of your Sellers and Buyers.
I look forward to working with you!
All the Best,
Jim Aydelotte
