How to FIND “RENT TO OWN“ PROPERTIES AND HOW IT WORKS - YouTube

hello hola i'm your girl reno mo money on this  channel we usually talk all about wholesaling  

what to do tips and tools on becoming a  successful landlord steps you need to take  

things you need to avoid and things you need  to do well today we're going to talk about  

rent to own properties how to find rent to own  properties and how rent to own work so come on in  

rent to own rent to own is another great strategy  to obtain properties finding a seller that is  

willing to do a rent to own is pretty much  like a gym it's it's kind of hard to do but  

it can be done it's actually a great strategy  again if you are trying to leverage your funds  

and all investors should be trying to leverage  their funds remember we talk about wholesaling  

on how you can get funds and leverage funds we  also talk about obtaining properties and buying  

and holding properties again these properties  are not that easy to obtain because of the terms  

a lot of times the terms are set up a certain way  and that seller has to be really really motivated  

also i would also highly recommend doing a rent  to own if you're doing your first one or second  

one or you're not too comfortable with doing  a rent to own but it sounds good once you get  

all the details you want to make sure it's set up  legally you want to make sure it's set up properly  

so you ask how do i find rent to own properties  well the first way to find a rent to own property  

is going directly to the seller remember i said  on several videos that you want to find people  

who you can solve problems for they're going  to be distressed homeowners that you can solve  

problems for so the first way is to go directly  to a homeowner as you're talking to the homeowner  

make sure you have resources always make sure you  have options you'll get that with experience but  

make sure you have options to help solve the  problem you'll know which technique to use and  

you'll figure out real soon if rent to own will  be the best technique versus buying cash out  

buying it subject to buying it um seller finance  you'll know when it's right and i'll go over that  

as well so as you're looking to directly  contact the homeowner you want to put out  

homeowner signs you want to put out some banning  signs you want to have your advertising piece  

you want to have your advertising piece structured  where you're targeting homeowners again landlords  

when you contact your relative buddy ask for  houses that has been on the market for a long time  

that can possibly be a plus knowing that that  seller is a little bit more motivated because  

they were trying to sell but yet they have  not so the first way to find is basically to  

go directly to the owner put out marketing pieces  the second way to find rent to own properties is  

through a divorce attorney a divorce attorney  usually gives their client the advice they usually  

give the recommendation and usually a property  is the center of a divorce 98 percent of the time  

there's a divorce there's also a property involved  that's a nugget there 98 percent of the times  

there's a property involved and if you contact  a divorce attorney you work out something with  

the divorce attorney you develop that relationship  nine times out of ten they will recommend you as  

the solution specialist the solution the problem  solver because they know that you're buying they  

know that you have solutions they know that you  have alternatives on ways of getting that property  

taken care of in while they are going through the  divorce or after divorce a property is usually  

the center when you're talking about a divorce  so that second one would be divorce attorney  

the third way to find rent to own properties  is working with a realtor with experience  

you have realtors that actually specialize in rent  to own you have realtors that specialize in lease  

to own you have realtors that specialize in credit  repair so work with an experienced savvy realtor  

working with an experienced savvy realtor will  funnel you and send you the deals that fit a  

rent to own as soon as they get a client that  don't fit the program for listing their property  

guess what they'll have you to come solve that  problem and you can possibly do a rent to own  

especially if that client already has tenants so  they're already collecting rent but they want to  

sell their home can't sell it there are some ways  that you can just really connect with rent to own  

that's another great creative financial strategy  to use in trying to obtain these properties rent  

to own so that third way is to find a realtor that  has experience keep in mind rent to own is a great  

way to start the process of owning a home now as  the investor you will need tenant buyers you need  

a tenant buyer the person that's the tenant that's  going to rent it slash is going to be the buyer so  

there's a process like i said you got to make sure  that you have your rent to own documents set up  

and that you have the terms and they're clearly  clear so before going any further i want to ask  

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something so far that's sparking you to say  that's a strategy i need to use rent to own  

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back in we talked about how to find rent to own  we had three strategies on how to find rent to own  

now let's move into how does rent to own work  the first thing you should know is that rent to  

own could cost the tenant buyer more money in the  long run if they default or they decide they don't  

want to do the deal if they decide they no longer  want the house they no longer want to do the deal  

they can't continue to pay that extra that their  paying is going towards the actual ownership of  

the home if that happens that's how the tenant can  wind up losing and default here's a tip here's the  

tip this is what i would do while they're in the  process and when i say process i mean that term  

period where they're paying let's say if you all  agree to a two year or three year or four year  

rent to own nine times out of ten the reason that  the tenant buyer is doing a rent own is because of  

their credit it's because they can't go out and  get this loan or they can't get the funds to uh  

that the the that the lender require so nine times  out of 10 that's a end of the road strategy for  

them to start the process of buying what you want  to do is while they are in that process like soon  

as they get in after the fourth month or the fifth  month of them renting to own you want to refer  

them to a credit repair company a credit repair  person specialist that is the reason why you  

need a credit repair person on your team you need  that credit repair so when you're at that stage  

where you're trying to sell you're at the point of  not just renting you're buying and selling and you  

got all this coming to you or you got two three  projects going on and you need to be able to do  

something with one because you're leveraging your  funds over here and you find that tenant buyer  

you actually want that tenant buyer to be able to  buy it one day so if you help them and send them  

through the process of getting their credit repair  just maybe after one year six months maybe they'll  

be able to actually buy the property so that's a  tip during that process make sure you link them up  

to your person that's a credit repair a person or  credit repair company that you're comfortable with  

that you know that's actually having turnarounds  and getting people scores to come up in doing that  

this will help the percentage of tenant buyers  actually becoming buyers instead of just a tenant  

because 90 to 95 percent never really become  a buyer 90 to 95 percent of people that get  

into rent to own never really actually purchase  and they default and they lose all that money  

because they never get themselves set up to really  purchase it at the end so as an investor you want  

to make sure you structure the deal properly and  that's going to be key in structuring the deal  

properly here's another tip if you're on here as  an investor as an investor it is actually better  

to do a lease with the option to purchase instead  of a rent to own and some legal reasons why and  

that's probably across the board in whatever state  you're in if you're if you are an investor if you  

are a tenant buyer or someone that's looking to  get a tenant buyer or you are a realtor that's  

trying to help out and get paid by giving someone  a tenant buyer it's a little different but as an  

investor it is easier and best to do a lease with  the option to purchase versus a rent to own okay  

let's go to the next step and even a little deeper  into how it works step one would be the agreement  

the agreement that you and the tenant buyer will  sign you all are going to talk about the purchase  

price and then set a purchase price the tenant  slash buyer pays the option fee you're going to  

have an option fee and that option fee is usually  one to five percent of the purchase price just to  

give you an idea the next important step is to  decide how long the terms will be usually it's  

between one to three years now i would say this if  you're an investor getting a property from another  

homeowner and you're doing a rent to own with them  so that you can utilize that house for short short  

short rentals vacation home or whatever if you're  going to be doing something else with that house  

you want to try to get the terms as long as  possible if you're the owner slash investor  

that you're doing a rent to own to a tenant that's  like your property then you want to make it as  

short as possible a good number is between  one and three so you want to set the terms  

between one and three years maintenance repairs  all that good stuff should always but always  

be inside of the lease maintenance should always  be inside and defined clearly makes a difference  

regardless of which hatcher you have on you  always want to make sure who's going to do what  

which who's going to be responsible for what on  that maintenance portion because there will be  

maintenance between that one and three years so  you want to have that clearly defined inside of  

that lease inside of that contract that's going  to be important because a lot of times that's  

what you'll refer back to when there's a problem  who's supposed to fix this what's supposed to be  

done i say this again rent to own is another one  of those strategies and another one of those tools  

that that tenant buyer nine times out of ten  would take care of that place a little bit more  

because guess what he's going to get ready to own  it if i'm saying anything to help you out if i'm  

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very helpful because it helps you from spending  all that money on a mentorship program or all  

that money on a training program and i know it's  thousands i did that i've been there i've been in  

real estate since 2003 and i've spent thousands on  mentorship i spent thousand on training programs  

i used to go places go to the seminars travel  and fly fly to go to a seminar to be right there  

so that i can get it hands-on that was the old  days i still had bumps and boozes even with that  

so and i'm still constantly learning that's the  thing you still got to know what's going on and  

you have to know now what's going on in 2021  it's definitely not the same as it was in 203  

and everybody knows if you were in real estate  or know anything about real estate and 0.708  

the market was just doing whatever we want to do  and it crashed so i mean things are different and  

things are turning around even now and you need  to be abreast and on this channel i'm trying to  

keep you updated matter of fact i'm going to also  do an update video on what's going on with the  

economy that's affecting us as investors that's  in fact that's affecting us as as wholesalers and  

landlords and folks that are lenders it's going to  really affect us so stay tuned all right enough of  

that now remember i said you have to have the  proper documents and remember i said to stay  

to the end so that you can make sure you get all  the nuggets and all the tips here's the thing and  

this is the big thing can help you save money make  money and avoid some mistakes when you're doing a  

rent to own the key thing is to have two documents  do not put everything on one document the first  

document is of course your rental agreement  rental agreement the second document that you'll  

use in doing this rent to own is your purchase  agreement or your option agreement whichever  

one you're using whichever your situation is if  you're in a situation right now that seems like  

you can get this rent to own or that homeowner  is okay with rent to own or you want to start  

mastering rent to own schedule a coaching call  with me we can go over this stuff step by step i  

can help you with specific questions any specific  information to help you out make sure that you  

don't miss a deal you can avoid losing money by  avoiding some mistakes so always educate yourself  

and it's okay if you don't have the money for  a mentor or mentorship program then you need  

to schedule a coaching call so again that's the  rental agreement and the purchase contract or  

the option agreement so that's two documents that  you'll need in doing a complete successful rent  

rent to own now there's things that need to be  in there so that's something that you're going to  

have to get take time out educate yourself that's  going to be important and you definitely can get a  

lot of free valuable information here on the reno  money channel so thanks again and you take care