Least we give the impression that the Lease Purchase business is all roses, let us tell you about what we came to call the Condo From Hell.
This deal started out like so many others. It was a very simple co-operative strategy on a 3 bedroom, 2 bath condo in a great area. The owner had tried to sell it both by using a listing service and as a For Sale By Owner for about six months.
Since condos and townhouses are hard to move in Las Vegas, we wanted firm numbers agreed upon before we met with the owner. She was told that we would try for a $3000 assignment fee to be split, however, the minimum profit we wanted was $1500. Therefore, we would take the first $1500 of the assignment fee and she would get the balance. If we received more than $3000, we would split that evenly. This was repeated when we met with her for the contract signing. She agreed and was very happy someone could solve her problem. Remember this, quiz later.
Her new house was almost finished and she needed her payments covered on the condo. Well, the new house was delayed about ten days, so we had to show the property while she was still in it. We much prefer the property to be empty, as it almost always shows better.
Our first clue that it may have been a mistake to take on this place was when she asked us "Should I clean". Our reply, "Yes, you should, and you may want to have the carpets cleaned and paint the walls". "OK", she says.
Well, I don't think we need to describe the condition the place was in. Add to that, she turned off the power without saying anything. Can you imagine what it's like showing up in the evening to show the condo to some tenant/buyers and finding it dark.
We were limited to showing it during the day which really cuts your potential market drastically. Needless to say, this condo was taking on a life of its own.
To recap, we had a dirty condo, with walls that needed painting, that we could only show during the day, and no way to demonstrate appliances, heat, air, lighting etc. With all the scams in Las Vegas, people are very leery of property where nothing can be checked out.
What's a good Lease Purchase consultant to do? Simple, we cranked up our marketing utilizing even more of our special techniques.
Finally, around the third week, we found a tenant/buyer who loved the area and the condo, warts and all. We did the credit check and agreed to meet on a Friday morning to assign the paperwork and pick up the check.
Need we say what happened next. The tenant/buyer didn't show up. Upon calling her, we find out she's at the gym. Well, at this point we started laughing. It was that or cry and we don't cry over deals. Later that morning, we spoke with the tenant/buyer and she told us there was a delay until the afternoon in getting her funds.
While it would have been courteous of her to call and save us a trip, this happens at times. We agreed to meet that afternoon to finalize the transfer. OK, guess what happened next. You're correct. She didn't show again. Now we're not laughing.
We spoke with her again that evening and agreed to meet at her place on Saturday morning, theorizing that if she's at home she can't get lost. Miracles do happen, she was there. We collected the agreed upon funds, took back a short two week note and all was well. OK, on the way there, we had a tire blow out. Talk about earning your money.
Are you with us so far. Contracts' assigned, money and note collected, new tire on the car. All's well with the world. Not!
We ended up settling for a $2500 assignment fee. Not bad for a condo in this town. We sent off the seller's portion, closed out the file and breathed a sigh of relief. A tough deal done with everyone happy, we thought.
Three days later, the seller calls up screaming that she was cheated out of all her money. Test time. Remember, we were to get the first $1500 with the seller getting the balance. Repeated and agreed to on three occasions.
Well, it seems that these conversations were conveniently forgotten. We patiently tried to remind her, then not so patiently. The seller is now threatening all types of dire consequences for us if we don't pay her what she is not entitled to. By now, our dander is up and we're ready to stand on principle. We know we did a great job, particularly under trying conditions and we performed exactly as we promised.
Thankfully, we utilize special contracts and forms that protect all parties in the transaction. We knew we were on solid ground and that she wasn't. We finally sent her a polite letter pointing all this out and basically told her to take her best shot. We guess that when she realized she couldn't bluff us, she gave up. We have never heard another word from her.
This points out the importance of fully documenting everything you do and not taking on a deal that you feel funny about. Honestly, we should have dropped this one in the beginning when things started going so wrong.
Thankfully, this deal is atypical of this business. It just proves that even the best of businesses have bumps. Lease Purchasing is a wonderful business that can be operated from a home office and provide wonderful security for you. All you need is the correct contracts, training and support. A good sense of humor also helps.
One last thing, remember the two week note, it was paid late. Go figure.
Copyright DeFiore Enterprises 2000
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