Category Archive for Lease Options

Just this last week I was lucky enough to be sent one of the new Massive Property Packs from Rick Otton. Rick wanted someone in the field doing the sorts of creative finance transactions he puts together that could comment and review his new property course.

I was so excited that when the courier left a sorry we missed you card i felt like i had let him down by not being home to get the pack. Sorry mate I was trying to tie up a townhouse complex with a buck and the conversation went way too long,but we can talk later! So I did not receive the pack until the following Tuesday.

Just to let you know the first property pack I bought from Rick was the Wrap pack in 2001 and for memory it came as a tape, folder, legal docs and calculator set. Not much bigger than most over night postage packs. The Massive Property Pack came in a box that the courier said was 7kgs! so this added to the anticipation!

You can see in the picture that its a very professional looking set of items that will help create a basic business if you simply follow the system step by step. And don’t change anything in the system besides your telephone numbers on the offers and forms he lets you use! Otherwise people will call him rather than you!

In the 2nd page of the folder manual states ‘How to Buy A House on One Days Pay‘ is really the basis of the pack. We all know that less money in any transaction reduces the risk of the transaction, but what if you could control, manage and on-sell a property you have no more exposure than a day’s pay?A true No Money Down strategy to buy property.

The general concept is not new and most property ‘educators’ are talking about options now the property boom is in a downturn and they cannot rely on capital growth to secure more seats to seminars and conferences. Rick has been doing Lease options and other no money down transactions for years. 15 or more years to be precise. His experience comes from the savings and loans crisis in the United States when banks were not lending on any property and guys like him had to buy houses and transact property without any banking system.

I am not saying he made the whole system up, that would be untrue, but I do not know of anyone who is so upfront and honest in the way he educates his students. I used to be able to call Rick on his mobile just because I bought his Wrap Pack years ago! Who else lets you do that? I think this shows he actually cares about what his students are doing with his material out in the marketplace.

My feeling is that Rick is trying to help people setup a business similar to his company We Buy Houses. The fact that the examples and checklists we received in the pack are branded We Buy Houses is a testament that nothing is off limits in his eyes to help his students build their own property business.

So what is the Massive Passive Property Pack like?

Well here are my initial findings!

1. There is literally so much audio content that you will have to drive to Perth and back to get through it! Seriously, you will have to spend some serious time getting through these, but the content is fantastic, you just fly through them. You may think this is a drawback, but I think that as a hands on sort of guy I need to hear someone talking about the concepts and ideas for the lessons to kick in.

There are private phone calls, conferences and meetings, one on one conversations and private mentoring sessions that are covered and heaps of professional people who have supported Rick are involved. Guys like Tony Cordato, the vendor financing lawyer everyone uses in Sydney. There is Lewis O’Brien who is the Lawyer for the Victorian Guys using Rick’s techniques. Most of the audio is transcripted in a seperate folder and for those of us who appreciate being able to re-read something is a handy resourse.

2. There is a couple of hundred pages of how to, what to and when to articles aswell as a full guide as to how each transaction should be set up. There is a step by step guide to speaking with agents and vendors and a full script for the telephone conversations that need to be made with confidence and also extract the information to make this business a success.

3. There are a couple of Dvds which help the students experience the ideas and concepts from a difference stimulus, which is great as it gives a whole new understanding as some of the content on video is a workshop and it discusses basic terminology of the no money down strategies.

4. The successful sandwich lease options guide is a handy 40 something page booklet which I found to a be a go to guide today actually whilst trying to get an agent to sell my concept to his client.

5. There are two audio cds from two of guys living and breathing the business just like Rick. One of them is Martin from Cairns who makes a Million Dollars per year from This business and the other is Chris who is a Dancer in Tasmania. Chris is a normal family guy who has to buy properties cheap or for no money in it to get his business going. These are eye and ear opening as getting started is hard with a few blunt NO’s from agents etc.

6. There is every state in Australia and New Zealand’s paperwork and all the legal requirements have been listed by Lawyers in those areas. This is great if like me you live on the border of two states and do business in both!

The Massive property Pack will no doubt create so much attention in the real estate industry, that rick will be busy aging making more and more copies to make sure there is enough to ensure our business keeps growing and growing. As the Martin the Cairns Guy says. ‘Just back yourself and go for it‘ and ‘We offer a superb, superb alternative to the banking system this is going to be more and more common’.

Get a copy of the system from this link. Massive Property Pack Rick even offers a 5 times the price guarantee, so if you follow his system for a year and do not make more than 5 times the cost of his program, he will refund the cost of the Massive property Pack.

Don Christie

I have just come across a vendor finance calculator that makes my ‘evaluating’ process so much simpler and easier. It makes all the correct assumptions and calculates everything I need to know about the validity of a Vendor Finance transaction.

Its called the  Vendor Finance calculator and it was developed by investors who needed to understand how much, when and what their costs or profits would be.

I have run a few deals by the site and they are easy and very straight forward to read and understand.

The calculator works for investors doing all vendor finance transactions including

1. Instalment Contracts or Wraps
2. Lease Options
3. Back to Back Lease Options
4. Second Mortgages
5. Joint Venture Agreements
6. Honeymoon Rates Mortgage
7. Insurance Varying Laws
8. Taxes between States

When submitting details into the system the calculator asks you what type of buy and sell you are proposing to do. There is even a section where you can qualify your buyers. There is a section on the site for saving transactions and you can log into see what people owe you and what they are repaying you. I found this really handy when out of town last week.

I am sure you will agree that the guys at Vendor Finance Calculator have got a great free program for you to evaluate your future transactions. The best thing is that you can do dream scenarios and calculations varying different components and styles.

You do need to register to use the program however I see this as a great way to keep in contact with fellow investors and when the guys upgrade things no doubt they will keep the registered users up to date.

Still Wrapped!

Don Christie

With today’s inflated real estate prices, many hopeful home owners are stuck renting as they experience difficulties securing home finance as they don’t pass the bank’s strict lending criteria and others, simply can not afford a large cash deposit. Especially with the increase in the interest rates yesterday!

It would be great to use some of the rent you pay the landlord, but that will never happen or will it? Read the Rest.

Buying and selling houses is easy. You just go the the agent’s office, sign a few documents and then contact the bank. 30 days later you have a debt and a house! Its easy.

So why do most investors fail? They fail to set up a system that keeps breathing cash for them instead, even when they have no money to keep coming up with deposits.

May I suggest to you that for every property you buy, you ‘control’ another to make repayments for you? How? Well, if you buy a property for say$300,000 then rent it out, you will find you are short each week by $100. That is the difference between the rental coming in and the mortgage going out each week.

Ok, so how do we set this system up to make up the shortfall.

Lease Options.

Everyone understands a Lease. Most people have rented a property so you know your obligations and responsibilities. You pay a rental bond. You agree to pay the rent on time, when it is due. You also know how easy it is to stop the lease agreement too. You just give notice and usually you get your bond back minus any cleaning bills.

Options are used in the big end of town when people want to control things that they either don’t have the cash for, or are waiting for council or government approval etc. They give the option holder the right to buy something at a predetermined price in the future.

So when thinking residental real estate investing you need to get you head around controlling assets and not buying them. We all want the benefits from the real estate, but not the obligations of paying for it; Lease Options are a great tool to do just that.

You need to negotiate with the vendor or agent what price they would like to ’settle on’. Once you have that figure you can work with what the rent will be each week. You then need to work on a term or time frame for both the lease and the life of the option.

A great example is a house I offered a lease option on yesterday. Its a $1.5 Million Dollar canal front house, here on the Gold Coast, and would be worth $1.5 Million all day long. I said that I will pay the amount equal to the mortgage obligations per week. The vendor was happy because I had taken away the pain of making repayments for him. Next we worked on the term of the agreement. We both think that 24 months will be a good starting point with the possibility to extend after that. I said I was happy to pay $1.3 Million for his property either before the 24 month agreement ended or at the end. He countered with $1.35 Million. I could have asked for all the rent going to him to be taken from the $1.35 Million when I settle on the property, but I thought I had done quite well so far.

You can see I have a few directions I can go from here:

1. I can go and get bank financing and buy the house now and likely realise a profit of $150,000 fairly quickly.
2. Let the rent from the tenant cover my obligations each week.
3. Sell the deal to an investor who will cash me out of it today for the right to collect into the future.
4. Sell the property on to a family who is looking to try before they buy. In other words, a Lease Option themselves.

Most property solicitors understand Lease Options as they are simple and it’s easy to advise their clients. I like them because there are no banks involved.

These Options can take all sorts of directions and will increase your wealth ten fold in no time if you do it with integrity and honesty. Make your vendors happy that they can sell what they want and get relief from payments and the headaches of tenants.

On a side note, you will find your potential buyers like the lease options as they cannot be traced by solicitors and lawyers. People going through divorces or marriage disputes can get into property without their partners knowing about it, and therefore cannot do much about future profits or benefits realised. We don’t really need to know, but its just life!

Lease Optioning the World

Don Christie