Always Have a Contract With The Contractor - 101 Street Smart Cash Flow Accelerators #71

Lou Brown

Oct 29 2019

Hi, it's Lou Brown. I'm back with another of my 101 cashflow accelerators where you can separate yourself from being just a landlord into housing provider, an affordable housing provider. In fact, a certified affordable housing provider. One of the things that I teach you to do in this particular segment is to separate your documentation. So in other words, we're entering into two different agreements. If we're going to do a lease with the option to buy, we've got a lease, you've got what we call our standard rental agreement, and that covers the relationship that we have with them as an occupant of the property. Separately, they're going to purchase another thing called an option to buy and and that option to purchase is going to give them the right to purchase that property within a designated period of time with a certain [inaudible] requirements within that, and as a result of them agreeing to that separate agreement, they now have that option to purchase the property.

Well, what my advice for you is to stay out of trouble with the court. If you combine your rental agreement with your option agreement in the same document, it can create problems for you. The judge can look at that option fee that you collected, which is typically non refundable. And that's what we want to collect, right? Non refundable option consideration means that we can actually spend the money now we don't have to escrow it, we don't have to wait until later. And if you choose to give some or all of that amount as a credit towards their purchase of the home, that's fine. That's going to be designated in the paperwork. But you can go ahead and spend the money right now. And there's so many benefits to doing that. Of course, that's a major cashflow accelerator. And the important thing is documentation that your standard rental agreement is separate from your option agreement because there are two different agreements that are happening simultaneously.

And so you want to get the benefit of both of those and not have the judge look at your option consideration as security deposit. So over in the standard rental agreement, we've got that segmented out. And in fact, uh, we teach you that there's actually another way you can handle your down payment in relation to the option agreement. So those are two different documents, two different agreements that you're making with the resident that will keep you out of trouble. Baby, that's a brilliant thing. So hopefully this has been of to you like it, love it, share it and do subscribe. Thanks so much for joining me. If you want to learn more about options, you can definitely do that at my lease options course. Street-smart investor.com go to tools and then go to volume nine lease options. Well worth the investment. Get the six CDs, get the forms disk with all of the forms for both buying and selling, using the lease with the option to buy technique. It's a wonderful way that we've used for now over 40 years of being in this business of buying, holding and selling property, giving others the opportunity and the path to home ownership. You too can make a difference in your community and in other people's lives. I hope this has been a value to you. Like it. Love it, share it, and do subscribe. Thank you so much for joining me. My name's Lou Brown.

Lou Brown has been buying, selling and holding property for 40 years and you are about to discover what a lot of so called gurus are missing.

* How to buy all the property you want without ever visiting a single bank or needing to qualify for a loan…

* How to have a buyer or renter before you even buy property…

* How to have them already pay you money before you sold them anything…

These are exactly the kinds of deals he does day in and day out. Most 'investors' are getting it wrong. It's not about the property, it's about the buyer. Buying right and buying cheap is what you'll do after you have the buyer.

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Real Estate investors in all fifty states across Canada and fifteen foreign countries including as far away as Australia and New Zealand, have long regarded the training, systems and forms created by Louis Brown as the best in the industry, Quoted as an expert by many publications and authors, “Lou” draws from a wide and varied background as a real estate investor having been buying property since 1976.

He's invested in single-family homes, apartments, hotels, developed subdivisions and built and renovated homes and apartments. Each of these experiences has given him a proving ground for the most cutting edge concepts in real estate today. He's widely known as a creative financing genius with his deal structuring concepts.

Being a teacher at heart he enjoys sharing his discoveries with others. He has served the industry in many volunteer positions such as past President and designated lifetime member of the Georgia Real Estate Investors Association, the world's largest real estate investor group.

He is also founding President of the National Real Estate Investors Association, which serves as the umbrella association of local investor groups.