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INTRODUCTION

Lease Options: Anyone Can Do It!

Fourteen-year-old John and his father attended a seminar I spoke at in Houston several years ago. During one of the segments of the presentation I usually teach my students how to call sellers directly out of the newspaper or from Craigslist. When I teach this part of the class I make live calls to sellers for the benefit of my students so that they can hear what I say to the seller and how I gather information to determine whether or not their home is a potential candidate for a lease option. On this day, however, I didn’t even make any calls – we were simply talking about best techniques for calling leads.

The next day, while John was in school, he began circling the “For Rent” ads. After school he started making calls and followed my script – with no caller training – and he got a seller lead for a lease option who said “yes” they’d like to consider it. However, being only 14 and having no experience, he couldn’t and didn’t know how to enter into a legal contract. He went to his father and said, “What do I do?”

John ended up selling the lead to another investor in their local investment group for $500. He gave me a copy of his $500 check. Not bad for a fourteen-year-old kid and one to two hours of work. John immediately went on to develop a relationship with a local investor, and on his next deal (while still 14!) made 50 percent = $14,000 - of profit for his assistance in the deal. He has since done additional deals for much higher profits.

How and why can a fourteen year old kid do this and yet most adults would not? Is it fear of the seller saying no? Is it fear of the seller saying yes? Either way it is FEAR! We are afraid of failure. I believe we all have fear of failure and/or fear of success. At fourteen, he was not afraid of failure. Heck, he probably hadn’t even been dumped by a girl yet. He just applied what he learned and tried it. When you know what to say and when to say it, it makes it so much easier.

You are never too old or too young to start investing. If you can do the research and pick up the phone to make the calls, you are on your way. However, many of us stop before we even get started because of fear. We let that get in our way of success. We might have excuses of:

“I can’t possibly do that.”

“It’s a young person’s game.”

“It’s an older person’s game.”

“No one will say yes to me.”

“I have no experience.”

“I don’t have a good voice.”

“I don’t have money.”

“I don’t have good credit.”

Insert yours HERE…

All are negative talk and incorrect statements.

What’s going to make you successful with lease options? Taking the plunge! One of my favorite sayings is: Smart and Successful People Take Action Now and in the Present Moment. You’ll make some mistakes along the way, but so what? As long as you can get over the “I’m okay with myself if I make a mistake,” then what’s the worst thing that can happen?

John wasn’t hampered by fear, and so was able to jump in, take the plunge and make things happen--setting his financial future in motion. His example is by no means a huge amount of money, but nothing to sneeze at either. It is a fantastic amount for most people and extraordinary for a 14 year old. The money is not only important because John can now pay for college, but now John has choices. If he continues on his path in real estate investing, he will have the possibility of being independent and working for his own interests, unlike most of his friends. Choices are freedom!

For me, the most exciting facet of real estate investing is Future Financial Freedom - or as I call it - FX3. Everyone has different definitions of freedom. For some, it is financial; for others, it means having more control over their time. Let me have one of my BootCamp students explain this in their own words to you first:

Dear Wendy,

Our financial future has literally changed within the past couple of weeks by applying what my husband and I learned from your BootCamp. Even more importantly, what we’ve learned from your on-going, personalized support – you truly are the best! Keep in mind, my husband thought that I was crazy when I signed us up for your BootCamp and flew up from Florida to Michigan to hear you speak. It truly was the best thing we have ever done. Please share my personal testimonial with your classes. I’m a believer, this does work!

First off, I have to mention when we attended your seminar we had just completed a 1031 exchange, which gave us the great opportunity to start our investing career by buying 3 houses. Yes, it was so great having 3 houses sitting empty and one with a renter that lived off of us for free! This renter was so nice she gave a whole room to her pet rabbits to roam freely in after we had just re-habbed the house!!!

During the BootCamp my name was drawn to purchase a house on a lease option. Yes, I jumped for joy like I had just won a prize. The next day after the Coronas wore off I figured out what I had just committed to – a house that is a 1,000 miles away, where it actually snows, the pipes freeze, and they have things called basements! Yes, being from Florida this is just what I’ve always wanted - NOT!!! We were up for the challenge and Wendy made it so easy with her support along with the great contacts and help that we had from others who attended the boot camp. Not only did we get a great purchase price and terms with the owner, but today we have a pending contract for a lease option that will cash flow us $600 a month and at the end of the 18-24 month term we will profit $107,400!!! Gosh, I guess that will cover the cost of the class – TRULY AMAZING!!!!

When we came home from Wendy’s class we decided no more renters. We turned around booted the bad renter out, (and no we didn’t keep the rabbits!) We sold all of our houses on lease options. So my 3 houses we had sitting empty, we now cash flow $700 monthly and we will profit within 18-24 months, $227,900!!!!!

Now comes the best part . . . I finally put Wendy’s class to the test. I went out and found an owner that was willing to do a lease option with me. Every Realtor I spoke to, (and many investors as well), told me no one in their right mind will do a lease option with you in this market. The Florida market is way too hot. They are right. It is hot. Appreciation in some of our areas is anywhere from 34-40%. I got a gorgeous house that looks brand new on a lease option. I also got a killer deal on the rent at $950 a month – normal rent would be $1425! I did put $5,000 down which will come off the purchase price. They were asking $200,000 and it’s worth $239,000, so I offered them $210,000. The terms are 14 months, enough time to refinance it if I have to. My new tenants bought it on an 18-month term. We will cash flow on a monthly basis $845.00 ($500 of that will be applied towards the purchase price) and we are selling it for $299,900 – that is a profit of $89,900. Amazing, is this for real??? I’ve since quit my job and I’m doing this full time. Thank you again Wendy for changing our lives!

Deb and Eric Larson

Why I Chose Real Estate

Deal making may just be in my blood. I’ve always loved a deal, and the day I realized real estate investing was that kind of game was the most important day of my life. My first house was a three-bedroom bungalow in a suburb of Detroit. I had just moved into town for a corporate job and there was no housing available—I lived in a hotel with all the other corporate recruits. My PITI (principal, interest, taxes and insurance) was $438. I rented two bedrooms to two friends from the hotel for $250 each. I had cash flow and I was living free! My $62 cash flow per month paid my credit card payment. I was 21 years old and I thought this was pretty cool! So I decided to do it again. I did that three more times that first year. I had no money or assets, but I did have credit cards (which I do NOT recommend using for real estate).

At the start of my real estate investing career, I was $20,000 in debt with student loans. In my mind, the worst thing that could have happened was that I would go bankrupt. However, I had good credit and was able to make my down payments on homes with credit cards. It wasn’t long before I had a credit line of over $250,000 – and too many credit cards. Using credit cards should be the last resort for most investors as I lost a lot of profit by having huge revolving credit card debt – even though I faithfully made payments on all of them and somehow juggled them so that no payment ever slipped through the cracks! It was, however, an administrative nightmare. Still, I couldn’t focus on that. I had to focus on what was the best that could happen. I could end up with FREEDOM and CHOICES!

When I started investing, I didn’t know about lease options. I thought what I did was a zero down deal and something very creative. I didn’t know of any gurus at the time that focused on buying on options, so I developed my own tools and systems to buy homes with little or no money down using the same techniques I was using to sell. I have since purchased almost every course available in the market on options, and learned extra tidbits from them all to add to how I do my business. I am the only national educator in the country that teaches people how to work with Realtors to find these types of zero down deals. Over the years I have fine-tuned the techniques that really work. I have completed hundreds and hundreds of lease option contracts.

I have bought and sold over 600 properties since becoming an investor in 1985. I have had as many as 175 properties in inventory at one time. My current and longer-term goal is to have 30 free and clear in my inventory. Thanks to the turn of events in Michigan, I am well on my way. I have invested in multiple states and continue to look for new opportunities throughout the country and internationally, but at his time have found my best deals close to home.

Whether you’ve left your job to pursue your own dreams of becoming a baker, a pilot, an artist or a Realtor® – we all have the same concerns and fears about starting out in a new business venture where we have to rely on our own efforts to make a payday. Even then, the first couple of years can be rough. It takes a while to “pay your dues” in any new skill – and learning real estate is a skill – but real estate not only has immediate profits through lease options, it can automatically provide investment income by the very nature of appreciation or equity buildup (to be discussed later in this book). Real estate builds a tangible future that can set you up for life if you have the passion and the drive to dig in and overcome the fears of trying something new.

I am so glad I pursued my dreams in real estate many years ago. When I left corporate America in the mid-1990’s to pursue real estate full time, it was the best career move I have ever made! It has given me financial freedom. Do you want to be free? Real estate can give you Future Financial Freedom (FX3) too!

This book will share my secrets and strategies of Sandwich Lease Options with you. I suggest you try them all and decide what works best for your personal style and your specific area of the country. As you find your niche, you will perfect it. Real estate investing changed my life and it can change yours too. May lease options and zero down strategies change the way you think and help you live out your dreams so that you may have all the choices and freedom you desire!

Wendy Patton

P.S.: Please drop by http://www.facebook.com/wendypatton and leave a few words about your thoughts on this book.