$7500 in 24hours!

Thom called me up and said the magic words:"Claude I have a problem, can you help me?"My Tenants are moving out !!!!! I live 3000 miles away and I can’t fly back and forth across the United States a dozen times. I can’t afford to have this property empty for too long and on top of it all the property values are dropping! My wife can’t sleep at night worrying about our old home. I don’t know where to begin; is there any way you can help me out of my dilemma?I felt sorry for Thom and his predicament, but I do love problems and challenges in residential properties. I call these O.P.P.s (other people’s problems or properties). These situations usually lend themselves to great upfront profits and residual income. I know from past experience that adversity is nothing more than profitable opportunities in disguise.A good problem can be worth more money to you, the creative investor, if you have an inventory of practical Win/Win solutions like the Lease Purchase (AKA: Lease with an option to buy).Little did I know that Thom’s problem would result in a $7,500.00 upfront gross profit in 24 hours!I explained to Thom that I would like to structure a Lease Purchase on his property (what else?) and that I would begin to look for a suitable Tenant/Buyer. Thom and I decided that I would put together an Assignment Lease Purchase. This is essentially when I get all the terms of the deal in advance, lock it up with a contract for $1.00 token consideration and then I will assign my contract with Thom to a third party, the Tenant/Buyer. We agreed in advance that I would keep the Option money and the positive cash flow from the Assignee (new Tenant/Buyer). The best part was that I had no payments to make and no liability on the property. I just had to find a qualified Tenant/Buyer.The numbers on Thom’s home were as follows:First Mortgage: $168,000.00Mortgage Payment: $1,100.00 per MonthThom wanted a Sales Price of $220,000.00 (wishful thinking) on a 1 year Lease Purchase contract and he would give 50% rent credit for a one year term.I first checked my database for available Tenant/Buyers who were looking for a property of this type; a three bedroom/two bath, 2000 sq.ft. upscale ranch style home. I then called one of my favorite real estate agents (Bob) to see if he had any clients who wanted to move into a home today, one they could buy tomorrow and have half of the rent credited to the purchase of the home.I wanted a minimum of $5000.00 with $1400.00 per month rent.Bob called later in the day and told me he had someone who was willing to put $7500.00 down as non refundable option consideration. I instructed Agent Bob to have his client drive by the property first and if interested I would arrange for him and his wife to see the inside.Special Tip: Always have the potential Tenant/Buyer drive past the home first. It saves a great deal of our most valuable asset, TIME. If they like the home on the outside, then they will call back and you can arrange for the inside to be shown.Our potential Tenant/Buyer saw the inside, loved the property and wanted to do the deal. (for $210,000.00) We did a credit check and everything checked out OK. I utilized my own Lease with Option to Purchase Agreement inorder to protect all of the principle parties. The is a very specific Lease which is designed to put the property on a management Auto Pilot.We received a check for the $7500.00 and another check for the first month rent of $1400.00 plus the credit check charge of $30.00. I paid Bob (my bird-dog) a $2500.00 finder’s fee*.Let’s look at my profit picture on this deal:Option Consideration: ($7500.00 less the $2500.00 I paid Bob) $5000.00Positive Cash Flow: ( $300.00 X 12 months) $3600.00Total Net Profit for Claude: $8600.00I called Thom the day after his original urgent phone call and gave him the good news. He was thrilled with what I had to tell him! The property was rented with an option to buy and his problems were over for now. Thom has a new Tenant/Buyer who will cover his PITI (principle, interest, taxes, insurance). The Tenant/Buyer must pay his rent on time inorder to receive his rent credit and take care of the maintenance and minor repairs of the home. Thom still keeps his tax benefits on the property and if the property sells he will not have to pay a real estate commission or closing costs.This is a Win/Win deal for all the principle parties concerned and a great way to make money as a private investor on a consistent basis.Now the only question that remains is whether I should take the rest of the week off or go and do another Lease Purchase assignment ? Who knows what fortune the next 24 hours will bring!By the way, Thom’s wife is sleeping much better now.* Hey, I’m generous to a fault. Seriously, I always pay well for quality referrals. Bob will find me some more Tenant/Buyers or Properties to structure Lease Purchases with in the future.Money is a very good motivator !

George Pragovich
931-378-7850
gkp@charter.net