rent to own seminar

Real Estate Investors Education & Mentoring

Lease Option Rent To Own Seminar

Copyright 2011 – World Wealth Builders – All Rights Reserved


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Disclaimers

Information, strategies and opinions contained in this presentation are provided for general information and convenience only. Since the particulars

of each situation may differ and information may change rapidly, one must seek appropriate, qualified professionals advice before acting based upon any information provided by the World Wealth Builders or any affiliated

association.





“How to make Money $$ Lease Option/Rent to Own”

Canadian Real Estate Investment





Want to learn fast, then…

04/10/2023 4Copyright 1993-2012 – World Wealth Builders – All Rights Reserved



Monday, April 10, 20235

• What is Rent to Own/Lease Option?

What is it?




How to make money with it?

1.Option $$ upfront

2. Above market rent $500-$1,000 Cash flow a month

3. No capital required

4. Guaranteed return

Where is the money?



What is Rent-to-Own?

• Rent-to-own your home• Lease with option to purchase• The program

– Small initial deposit (part of down payment)– Monthly payment (partly rent, partly toward

down payment)– Option to purchase the house at the end of

the lease term



The Differences among Rent-to-Own’s

• There are no regulated way of Rent-to-Own

• Potential variations:– Initial deposit requirement from tenant– Amount of credit toward down payment each month– How to establish future purchase price– How to handle expenses during the term– Types of contract:

• Lease with option to purchase• Co-occupancy contract



Why Rent-to-Own? – Tenant

• Opportunity to buy a house under difficult circumstances:– Not enough down payment– Bad credit or no credit history

• Lock in purchase price when saving up for the down payment

• Pride of ownership and flexibility in upgrading the property



Why Rent-to-Own? –Landlord/Investor• More or less worry free tenant

– Option premium– Tenant pride of ownership

• Saving in selling cost• Lock in profit and cash flow• Improve cash flow• Secure investment• Helping people and earn money

(Feels Good AAh!)



What are the risks with Rent-to-Own?• Tenant moves out during lease term

– Non-refundable option premium– Contingency funding in place– Property at good location and value

• Market condition changes – drop in value/not appreciate enough– Buy below market value– Work with tenant to facilitate purchase/extend

lease term– Non-refundable option premium



What do you need for a Rent-to-Own project?

• To put a Rent-to-Own Project together, you need:–A qualified Rent-to-Own tenant–A good property–Investor or investors to

buy the property



How to make money in a RTO project?

• There are 3 Key elements:– Buy below market value (aimed at about 10%

below market value)– Rental income during lease term (look for

property at a good capitalization rate, market rent v.s. market value)

– Property appreciation in value during lease term (look for property at good areas, target at close to 5% on average, set realistic expectation)



The “Bag of Tricks”

• We have many tools in our “Bag of Tricks” from finding tenant, finding investor to pull it all together.

• Let’s look at a few of them



The Rent-to-Own Process



Where & How to get Rent-to-Own Tenant

• Advertising: Kijiji, classified ad, signs, landing page/squeeze pages– Tips for Kijiji ads:

• Pictures• Be specific about a property• Drive them to take actions (call NOW)

• Referral, Referral, Referral– Current tenant– Potential tenant– Real Estate agent, Mortgage agent– Hair dresser– Tim Horton, Country Style…



Basics of Your Marketing Efforts

• Expose your services to many people• Attract the attention• Drive them to take actions

– Call or email you– Leave their contact information

(sign-up form on landing page/squeeze page)



Expected Conversion Rate

• 100-10-1 (100 people see your information, 10 people contact you, 1 resulted project)

• A good Kijiji ad can expect about 300 people looking at it in 3 days



How to convince a potential tenant to work with our RTO program? (The first encounter)

• Focus on establishing a rapport with the client• Clarify their understanding of Rent-to-Own• Gather as much information about them as possible

– Current family situation– Current rental situation– Family gross annual income– Type of houses that they want– How much can they afford (monthly & down)

• Set their expectation (realistic expectation)• Listen carefully and aim at providing them the benefits that they are

looking for• Remember to ask for follow-up contact information and referral



Tool to set Tenant Expectation


20

Mortgage Calculator Rent-to-Own Budget

Annual Family Income $70,000

Current Value of property 333,753.91$

% for mortgage payment 32% Appreciation rate 5%monthly mortgage paymentamount $1,867 Term of program 3 year

Interest rate 5.00%

Future purchaseprice (at the end of term) $386,362

Amortization years 30 Target down payment $38,636 10%Allowable mortgage amount $347,725.69 Client initial deposit $10,000

% down 10%

monthly option premium required $795

Value of the house that can be bought at end of lease term (3 years) 386,361.87$ monthly market rent $1,800Appreciation rate of the house 5% monthly RTO bonus $200current value of house for Rent-to-own 333,753.91$ monthly RTO payment $2,395



Explaining RTO Simplified

Monday, April 10, 2023 21



Where & How to find investors• Who you know is important; Who knows you is critical• Networking

– Physically attending PREIG Canada network meetings/events

– Social media – Facebook, Twitter, Linkedin– Need to show up. Need to be consistent.– Establish relationship with “Center of influence”

• Referral, Referral, Referral– Current investors– Real Estate agent, Mortgage agent– Hair dresser/cell phone story– Having lunch



What to do with potential investors?

• Be passionate with your investment strategy

• Establish rapport• Share the stories of your project• Tell them enough to generate interest, not

enough to make decision. Decisions are for follow-up meetings

• Focus on helping them to understand



Feasibility Analysis

Monday, April 10, 2023 Copyright 2012 – Rent to Own Specialist Canada – All Rights Reserved 28

Lease Option Feasibility Analysis:Dash Board

Result Matrix DCRInvestor Profit

Tenant % Down

Tenant MonthlyPayment

Current Value 1.36 70% 10.3% 2,080$ Target 1.10 60% 10% 2,000$

Description of the property: 1930 AshwoodType of Property: Free Hold

Current Purchase Price: $265,000

Monthly Market Rent: $1,600

Land transfer taxOther Ont. City $2,450

Rehab cost/setup cost: $2,000

Closing legal fee $2,500

Avg. Annual Appreciation 5.0%

Assignment fee $7,000

Adjusted Cost base: $278,950

Annual property tax: $3,500

After Repair Market Value: $290,000

Annual Insurance: $1,000

Selling commission: 4.50% $13,050

Financing:

1st MortgageInitial Cash Investment $66,950

1st Mortgage Amount 80% $212,000 DCR(Free Hold) 1.36 Debt coverage ratio

Interest rate 4.00%

# of Amortization Years 30

2nd Mortgage RRSP 2nd Mortgage Amount $0

2nd Mortgage Interest rate 14%

Total Mortgage $212,000

Lease Option Arrangement: Note: Input field are highlighted in

Initial Down Payment $10,000 yellow

Monthly Rent (% of avg. rent) 100% $1,600

Monthly Option Premium (% of avg. rent) 30% $480

Monthly Condo Fee $270

Tenant Total Monthly payment $2,080

Monthly Option Bonus $200 (extra money to credit to Leasee's downpayment)

Tenant's Preferred Length of Lease (# of Year) 3

Lease Term: 3-Year





04/10/202329

Go to www.WorldWealthBuilders.com

Search for the clues

Receive your GIFTS

Priceless Gifts



Good, Bad & Ugly• Good cases: Guelph St, Oprington,

Ecclestone• Bad:

– City Place – Bad to Great– Wexford – Bad to Good, Thank God!– Hallen Rd – Bad to Not bad

• Ugly:– Hansen Rd – Learning experience– Bramalea Rd – Turn Ugly to beauty– Bryant Crt – Ugly recovering in progressMonday, April 10, 2023 30



The “Bag of Tricks” or Apprenticeship

• We still have many more tools in our “Bag of Tricks” like how to pull a RTO project together and how to run the project to ensure that we are making money at the end.

• What else you may want to know:– How to choose a house for RTO?– How to negotiate the best deal from seller?– How to save money in renovation?– How to deal with tenant issues?– How to deal with investors?– How to structure a RTO joint venture ?

(make money now, make money along the way,and make money at the end)

– How to sell the property to RTO tenant at the end of the term?.....



How to get the rest?• You got a lot of useful tools today, you can

use right away• World Wealth Builders is offering a full day

training course to provide you all the tools• It will be in September, 2012 in Toronto• The cost is $1995 per person. Two can

attend together at $2995.• After you attend the course, you will know all

of our bag of tricks. We may even partner with you in projects….




Today is your lucky day!

• Further discount from the price – twist the arm..but never break it!

• Most of you can attend the course for half priceProvided you buy the lunch for me

• You can make money with us now– For every person you refer to attend and pay

for the course, you will get $100 cash– When you refer 4 pay attendee, you attend

the course as complimentary






Lease option Rent to own Canadian Real Estate Apprenticeship – LIVE

Tuition fee $2495.00 plus HST

WorldWealthBuilders.com/live





Lease option Rent to own Canadian Real Estate Apprenticeship – LIVEToday Special $995 plus HST

Dates: September 2012

WorldWealthBuilders.com/live



Mentoring & Coaching for Real Estate Investors

Book an appointment for 30 minute Complimentary mentoring/coaching now!






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