Joe: The other, the third option, is that you could do a land contract on this

deal. A land contract doesn�t transfer the deed of the property. All it does is, is
an agreement between the buyer and the seller to buy the property and it�s kind of
like buying a car. The bank holds the title on a car until you pay off the contract
that you have on the car and then once you pay that off then the bank gives you the
title of the car. That�s the way it works on a land contract. And you can do that,
you can make it assignable so you could sell to somebody else on a land contract.
Joe: Now, if you buy it subject to you can sell it, you know, on a multi-mortgage,
you can sell it on a land contract, you can sell it subject to � or, I�m sorry �
lease option. You could sell it for cash. You know, every time you go down a step
in the hierarchy you have fewer ways to get rid of your property. You want to have
as many exit strategies as possible. If you go land contract you can sell it on an
assignable land contract, you can sell it on lease option, you can sell it on cash.
If you buy it on a lease option, which is not a safe way to buy, then you could
sell it on a lease option if it�s assignable, or you could sell it for cash, or you
could sell it for a land contract.
Joe: So, you see, as you drop down the hierarchy of zero down structures your
options get fewer and fewer on your exit strategy so you want to really be careful
about how your structure your deal. Don�t take sandwich leases because it makes you
responsible for them and you could actually be sued and they could get a judgment
against you. Whereas with a subject to, that doesn�t happen. On a land contract
they could sue you for that if you didn�t make your payments. So you want to make
sure you�re in a position of the most strength with the least liability with the
least money in it, never taking out a loan, never putting any down payments down,
actually making cash at closing, not just down payment, but actually getting cash
at closing and that�s how we would try to structure this.
Joe: Now the other option here is we could just take this property and we can get
this guy his whole $125,000, but we do it with an assignable lease option. I call
this the for rent method and basically what we�ll do is take this property with a
lease option memo, one-page memo that we�ve got, assign it, that makes us a
principal in the transaction, so it makes it legal for someone without a license to
sell a property that is not technically yours, but you have a principal interest in
the property. So you go out and you find a buyer for that property. You raise the
price to $130,000, you take $5,000 down. You give them, you give the seller, the
new buyer, they still owe $125,000 which is what you promised them, plus they�re
paying the $1,100 a month on the rent. And you�re in the deal, you�re out of the
deal, you�re done, now it�s in their hands and if it goes vacant again, you can get
back involved again and you can sell it for them again a year from now, two years
from now, three years from now until they finally have enough equity in the
property or until they decide that they want to liquidate that property on the MLS
and pay all those fees, which if they�re smart, they�ll hold on to that property.