On the show today we talk… Simple Real Estate Lease Options with Joe McCall!
Listen on: Apple Podcasts | Stitcher | Spotify | Amazon
Show Links:
- SLOClass.com
- Joe’s FREE Wholesaling Lease Options Book! WLOBook.com
- CDA Investors Summit https://cdareisummit.com/
Show notes: Simple Real Estate Lease Options with Joe McCall!
The Vantastic Life is…
– is in Winter Park CO!
Julie feels like a celebrity today because we have Joe McCall on the podcast, which is so awesome!!!
Julie
The number 1 strategy that you need to know right now! Lease options!
Joe
Give us your life story!
Joe McCall
Actually grew up poor but didn’t know it. Then got tired of working in the cubical, and starting looking at real estate. In 2009 started flipping lease options. Quit job in late 2009.
He found lease options were way easier to do, especially in a down market.
He didn’t feel like he was very good at talking with people on the phone, so he texted and sent voicemails.
Julie
What’s your favorite part?
Joe
Living anywhere in the world. You can do this business anywhere.
My family went to Prague and lived there and worked there.
When you get your business dialed, you only have to work 2-3 hours a day. And the time zone in Prague forced me to get more efficient.
He also started partnering with other investors that were doing deals.
You don’t need to be making a lot of money
It doesn’t cost a lot to travel around the world like you would think. They also homeschooled their children.
VA tips
Joe finds his best VA’s on Upwork.com.
Always ask yourself what a VA can do. The last thing you should give to a VA is talking to sellers.
Simple System Scale
The first must become complete before you can create another part of your business.
Give very detailed info about what you want a VA to do. Very specific.
Do a test with a few VA’s, and whoever does it the best, hire them!
FreedomSoft is the CRM that Joe uses.
You MUST have daily communication with your VA’s. Sometimes they will become overwhelmed.
How to communicate with VA’s
Zoom
After a few months you don’t need to communicate with VA’s everyday, but the VA needs to check in with you everyday via a some kind of report.
How to pay VA’s
Pay via Upwork.com. And Joe doesn’t communicate with VA’s these days, it’s his team.
He always overpays his VA’s on Upwork.com.
If you are hiring a VA that will be talking to sellers… you need to test them and record the calls. Have them call 10 for sale by owners and ask specific questions that they take notes on.
Think of VA’s as employees and family and friends. Because they are.
What is a lease option
Lease a property with option to buy at some time in the future. Which could be any time in the future.
You can control real estate without owning it. Which has a lot of options. You aren’t stuck with the real estate if the market dives.
You aren’t taking over the deed, which can raise some red flags.
Let’s say you find a seller that wants too much for his house. Joe gives an example. Checkout podcast to hear the story.
Cash now, cash flow, cash later
Joe only does lease options where everybody wins!!
You create a win with the seller because they might not be able to sell their house because they don’t have that much equity. Then you rent the house to own at a price that’s higher than the mortgage payment. Then you make money on the back when when you sell it to the rent to own renter.
You can give the sellers more options, and can do more deals that way!
How to wholesale a lease option
Claude Diamond has been doing this for years!
Tie up a property with seller. If there’s not enough equity or cash flow, you don’t want to stay in the middle of that. Enter into a contract to lease the property with like $10 down. Then find a tenant buyer that wants to buy the property. Then I sell my contract to the tenant buyer. At that point it becomes an agreement between A and C. The seller and the tenant buyer. You, B, takes the money and is out of the contract.
Do you need to be a realtor to do this. Joe doesn’t know, but he is a realtor. But he does these as an investor. Also, the seller signs the agreement. Everyone knows what it going on.
Everything is above board, and everything is disclosed. Sometimes Joe will hire a realtor to find a tenant.
Some of Joe’s first clients in Seattle were making $10k or more in assignment fees.
The seller has to be motivated
You ask why don’t you just list this with a realtor.
Is it more important to sell it quickly or for the highest amount possible?
It’s all about asking the sellers questions.
You need to let the sellers cook sometimes. Follow up.
75-80% of your deals are going to come from follow up.
Follow up from Marishka
We’ve had deals come back up to 18 months later. Their pain has increased.
Must find a good mortgage broker – Joe
Make sure they are good at working with tenant challenged buyers.
Never do a lease to buy with a tenant buyer that won’t be able to buy in 1-2 years. A good mortgage broker will help you do that.
How does that loan work at the end with the tenant buyer?
Can they get cash out if they do some rehab?
What are the terms.
Sandwich lease options
Julie is nervous about having to make the payments. So she has to find a tenant buyer to make the deal work for her.
Sometimes Joe sets it up so he has to find the tenant buyer before he starts paying.
Joe will also do a flexible contract so the seller can still sell the house at anytime before Joe finds a tenant buyer.
Or if it’s a smoking hot deal… Joe will start paying the payments, and even get a real tenant (that’s not a buyer).
Are the majority of the houses vacant?
The flex option is a contract with cancellation language in it. For Joe to find a tenant buyer.
Do you advertise for a tenant buyer before having a contract?
Nope.
Maintenance
Joe has a $500 caps. Anything above that the owner takes care of. You can also get an extended home warranty.
Let’s say the $2k AC goes out and Joe has to fix it… He needs to be ready to pay for it. BUT Joe puts in the contract that he gets twice that much when the house sells. So, he’ll get $4k at the sale of the house.
Then Joe passes on the under $500 thing to the tenant buyer, so the net should be $0 under $500 to Joe.
How to use the option fee
You should save that option fee just in case something happens. Use this as insurance.
Money flow
Joe pays the mortgage directly – Important!
Recording memorandum of option at the title company to cloud the title. It prevents the seller from selling the property. Or from getting a line of credit against the house.
Marishka is having Joe McCall at her October 21st and 22nd, 2022 — Coeur d’Alene, Idaho
Stay connected with Joe McCall
Free book at WLOBook.com, only pay shipping. Or buy on Amazon for like $60.
- Step by step on how to do lease option deals. These are GREAT in a down market!
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