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Work the Realtor System with Lease Options
Many investors think that real estate agents don't have the best deals or all the good deals have been picked over by the time they actually hit the market. There are some good deals on the market. And it is true that some of the best deals do get snatched up before they hit the market, but, there are many other deals left behind that no one sees. The reason they are left behind is because most people are looking for traditional, or retail homes and not the lease option homes. These are two different markets. The retail market is about 90% of the people and the lease option is the remaining 10% of the market.
Try to work with realtors that understand the concept of lease options and can help their sellers understand lease options. Your job is to help realtors understand them, because they are trained on the retail market, not the unique selling techniques. If they hear a seller say they have to sell their home or they will have to rent, then that's a deal for you.
Once you find the right seller, ask them to wait 2-3 years to get cashed out. You don't want to have your realtor wait that long. Why should they? They are doing all the work; they get the deal done and want to get paid for it. So pay them their commission up front. It is usually the option fee. Therefore the agent gets paid just like they do if it were a regular conventional sale. Some times you might consider giving them 1% at the start of the contract, and the remainder at the closing, or something where the payment is spread out. Be creative, but don't loose your allies. When you sell the home you will be asking for 3-5% down from your buyer/tenant, therefore you are still minimal or zero down/ out-of-pocket. If you are not a licensed agent/broker and entitled to half of the commission, then let the realtor double dip. Give them the listing agent portion up front and the selling agent portion when the home closes in 2-3 years. The seller fee would be like a bonus.
You should consider being a licensed realtor. It is a very good tool as an investor. Being licensed allows you access to your database of comps. This is the data you need to buy and sell real estate. If you have a good realtor and you don't want to get licensed, then that's cool. But some investors say it gives you more liability to be licensed. Some investors say that sellers won't sell to you if you are licensed. I think sellers are happy to know you are licensed; it makes you seem like you know what you are doing.
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