What Is The “For Rent” Method And How It Can Make You An Extra $5k In 7 Days
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The “For Rent” Method is what I teach at my Two Day Buying Event. This is the method that I teach to get my mentor students up and running and making cash as quickly as possible.
Read Transcript for “What Is The For Rent Method And How It Can Make You An Extra $5k In 7 Days”
You can make a nice chunk of cash in real estate by using the “For Rent Method”. I’ll explain what it is and how it works here.
“Can you explain the “For Rent Method” for me? Can it really make me thousands of dollars in a few short days? I need money now.” – Christie Lambert, Seattle, Washington
Joe: I don’t think you’re any different than most of the people that are watching these videos – you want to get to the money as quickly as possible, and absolutely – you can make money with the “For Rent Method”. And that’s why it’s the first thing that I teach in my “Push Button Method”.
Joe: When you look at the quick start video, it’s about the For Rent Method. When I have somebody start with my partner mentor program (my “Six Month Mentor Program”) I always start them with the For Rent Method. When we go to the buying event, I always start the buying event teaching the For Rent Method because it’s one of the quickest easiest ways to get money very quickly.
Joe: I’ve seen people make money using this method in five minutes, making thousands of dollars in five minutes. Those are people that are more advanced and they already have the infrastructure set up and they have their list built (because you can sell this very quickly). But I’ve also seen people that started from scratch, brand new people make this thing happen within a week. So, it doesn’t take long to make this happen.
Joe: Let me tell you the structure of how the For Rent Method works. When we’re not automating this process (because there’s ways to automate this process, too) this is what I start everybody with, because I think you need to go through the grunt work a little bit to understand the whole process; you’ve got to walk before you can run. So what I do is I have them get on the phone and call people that have their homes listed for rent and then ask those people, ‘Hey, would you consider selling your home rent to buy rather than just renting it?’ And we find that one in three of those people immediately say, ‘Yes, I would consider that.’
Joe: So what we do is we give them what I call the lease option memo. It’s a one page, very easy to read memo and easy to sign because it doesn’t obligate them to anything. We have them sign that, and essentially it’s a lease option that gives us the right as the investor to assign that right to buy to someone else, to another buyer. So we’ll take that lease option – that makes us a principle in the transaction.
Joe: And that, by the way, is what makes it possible for us to be legal doing this. If you don’t use that document, you’re not going to be legal. You have to be a principle in the transaction or you have to have a license to be able to represent that seller. You’re not representing the seller if you’re doing it my way – you’re becoming a principle in the transaction which makes it possible for you to do it legally and go out and sell that property to another buyer.
Joe: Once we get that lease option memo, then we go out and we find a lease option buyer. I have some amazing marketing techniques that make that happen quickly. As this video series goes on, we’re going to be talking about those techniques to find those buyers quickly and easily and with very little money. We’ll put our marketing out there, and we get a lease option buyer usually within a week or two weeks, almost always within 30 days, assuming that the deal was put together properly. We then ask that buyer to give us a lease option fee and the first month’s rent.
Joe: So, let’s say we have a property that’s worth $150,000. We’ll ask them for a $5,000 lease option fee and the first month’s rent. Let’s say it’s a $1,200 a month deal. We’ll get $5,000 in one check, $1,200 in another check and we keep the $5,000 – that’s our profit in the deal. The $1,200 goes onto the landlord. He gets that in the deal plus he gets full price. If he wanted $150,000 for his property, we are going to go out there and sell it for 155 even if it’s only worth 150, because we can get a little bit more because we’re selling it on lease option. So, we’re going to get $155,000 with the $5,000 that they give to us applying to their purchase price, so now it’s still going to be $150,000 to that seller.
Joe: He’s getting full price for his property. He’s not having to pay us anything. We’re paid completely by the seller. He’s getting a good lease option tenant instead of a regular tenant, somebody who’s going to see that property as their own and take care of it as though it were their own. They’re going to also be responsible for repairs to that property, which a regular tenant would not be, because of the way we’ve written the contract. I have a very detailed lease option contract that we use which is very seller friendly and will really help them through this process.
Joe: So, we find them a buyer. They lose the pain of not having somebody who’s making the mortgage payment for them or them just losing the monthly rent. We get the lease option fee and the buyer. They get a property and a home of their own, a home that they could not have qualified for. That’s why they’re doing it lease option – they can’t qualify for a conventional loan. Which, by the way, is most of the population right now – there are a lot of people that would love to have a house right now but they can’t qualify either because they don’t have the income, their credit has taken damage or they don’t have a big enough down payment.
Joe: We solve those problems. We solve the problem for the buyer, for the seller and of course we make money doing that. So, it’s not taking advantage of anyone. What it’s doing is helping other people, and we find that the people that we help – actually, Jim Dralle, one of the guys that works with me that’s one of my team leaders, has coined the term ‘The Crying Quotient’: how many people that we do these types of deals with who actually cry at closing, thanking us and appreciating us for the fact that, first of all, we found somebody to fit into their property and take care of it but also people that wanted to buy a property that couldn’t have done it otherwise who got their family into a nice home.
Joe: So, it’s a great program. It’s a great method of doing it. It’s what I do at my “Two Day Buying Event”. At one of the last buying events that we did, we had 48 people in the room. I taught the process over a two or three hour period in the morning, and then, I had people start making the calls and putting these deals together from all over the country. These were people from everywhere from Canada to California to New York and everywhere in between making these calls into their own particular neighborhoods and getting yes’s. And out of that hour and a half or so that we made those calls, after lunch, we had 97 deals put together; it was phenomenal.
Joe: There was a time where we did this where I had an 18 year old girl put together six of these deals in one afternoon. So, this is really possible. It’s not that difficult to get people to say yes. There’s a process that you have to go through, and we teach everything that you have to know to be able to speak to these people. We give you the script. We give you the questions to ask and we show you how to approach that process so that you can do it legally and don’t get yourself into trouble and so that you can follow through with the process. It IS possible to make money and make it quickly using this technique. I hope that helps. I’ll talk to you next time.