Tim Randle

One of the questions I see asked over and over on the REI newsgroups is "Can the seller get another loan?" This is a great question because it so often is one of the objections raised by a seller when a creative offer is being discussed.

I might upset some folks with this one, but that's okay as I think it's important to get some of my experiences into the light of day. If you fully believe the hype that you won't have any landlording responsibilities by selling on a lease option, go ahead and stop here. Or perhaps you should read on as this article is specifically written for you.

Another question that frequently pops up in conversation and on discussion forums is whether it's best to just schedule an appointment with the seller and jump in the car or spend more time prequalifying the lead on the phone. Like many real estate investing questions, the right answer is "it depends".

Take a minute to consider how many questions you ask and how much information you attempt to extract from a seller in a single call. Knowing what to say and when to say it will improve your performance more than you can imagine.

This list is by no means comprehensive and is not intended to serve as advice. I'm learning as I go and this is merely a reflection of my experiences. Please do not try this at home or with anyone else's home for that matter!

Contrary to what many creative investing courses may tell you, the old standby "location,location, location" still matters. I've seen both courses and speakers attempt to dispel this adage because the technique being promoted miraculously makes physical location a non-issue. I was foolish enough to buy into it. You don't have to.

I would not rush out and set up a separate entity for cash deals and a separate entity for keepers as I did. I would not set up an LP as my first entity as it involves at least two partners, one limited partner and one general partner. Entities are not set in stone. With the proper guidance and counsel from good attorneys and CPA's, you can make changes to your business plans as the business grows.

Having been a landlord since the early part of 1994, I feel fairly safe in stating I've tried almost every imaginable way of collecting monthly payments from my residents. I want to run through some of these methods and let you in on the pros and cons of each technique. I'll wrap it up by telling you what I do now.

One of the most effective and frequently overlooked methods of filling or selling a property is the use of directional arrow signs. I'm guilty of it myself, although usually I'm merely lazy instead of overlooking this great marketing technique. Being lazy usually costs me in terms of holding costs, especially if you happen to be in a buyer's market as I currently am. Even if you're in a hot market where everything is moving quickly, directionals will move your property that much quicker.