27 Feb How Do You Find the Perfect Buyer with Terms Deals?
Everyone wants to know how to find perfect buyers for terms deals. And it makes sense! Anyone getting into the terms niche wants to know 1) that they'll be able to find a buyer, and 2) that the buyer will be well-qualified and capable of closing out the deal at the end of the term.
In our experience, finding a well-qualified tenant-buyer is easier than most people think (actually the easiest part of the process) — for a few key reasons.
The House That Wouldn't Sell!
In this deal, the house itself had been on the market for a while and never received much interest. The seller thought it was because of a number of small things—the layout, the paint color, the driveway needing to be repaved, etc. Our Associate knew that these were minor issues that wouldn't likely hold back a tenant-buyer.
They proceeded to set up a sandwich lease agreement with a 36-month term. The total profit projected for the Associate we did this deal with all 3 Paydays ™ was $82,000+! Let’s focus on the buyer though because as I scan through the challenges and/or problem deals in our Wicked Smart Community, it almost always stems back to not handling the buyer qualifications properly.
Finding the Perfect Tenant-Buyer
At this point, you're probably wondering how our Associate was able to find a buyer to secure this deal, especially because it couldn’t sell on the open market conventionally. Well, let me first explain that finding a buyer for a traditional purchase and finding a tenant-buyer for a rent-to-own deal are two very different things.
When we take on a property that is expired or has had little interest, we turn around and market it to an entirely different group of people. The realtor was looking for people who are qualified and ready to purchase a home. We're looking for people who aren't quite there yet. COVID has driven the number of buyers struggling to qualify for a loan much much higher than normal and under normal circumstances, it was already high.
That means we have a significantly bigger pool of people to work with. In the case of this deal, there was little interest in the property when the realtor had it on the market. But when our Associate placed it under agreement and then marketed it to their list—all people who wouldn't have been able to buy the house with the realtor—the response was tremendous. All of those things that may have been issues for other people—like the layout, driveway, and paint color—weren't a concern for the potential tenant buyers looking at the place.
In fact, there were so many people looking at the property that the seller even called our Associate and told him he had to stop showing it. Our Associate already had six people who had taken the next steps with him.
So, finding a tenant-buyer is simple because you're marketing to an entirely different group of people than a traditional realtor can or would. These are people who will jump at the chance to become a homeowner because they would be otherwise unable to purchase a home through conventional means. We are providing a clear path previously not available.
This gets us to the second point; how to find the perfect tenant-buyer.
This one is simple as well! It all comes down to doing your due diligence and making sure your tenant-buyer checks every single box when you're qualifying them. We have an entire system for this and it’s all outlined in Module 6 of our Quantum Leap System Home Study Program (QLS). It includes 12 modules, over 60+ videos and audio so you’ll want to master module 6 for the buyer side. My son Nick even has live calls and meetings for you to learn from as he’s our buyer specialist. The main idea is that you should always default to what's on paper-the facts. Don't let your emotions play into it. That’s not being cold or uncaring, but this is business and the best buyers deserve your home, not ones that don’t qualify properly.
Nine times out of ten, when there is a problem with a buyer in a rent-to-own deal, it's because the person doing the deal trusted the buyer based on emotions, not on facts. So even if you “feel” like you have the perfect tenant-buyer, make sure it all works out on paper before you proceed. Some facts include job history, job sustainability, number of earners in the household, why they need time (credit, save more, etc.). There are many more outlined in the training but that gives you a taste.
That's what our Associate did in this deal and with all of the other deals he has done to this point. And guess what? He has a “perfect” tenant-buyer in every one of those homes.
Learn from him and the rest of our team EXACTLY how you can master this side of the business at our upcoming Business Scaling Secrets event.