“How to make PROFITS with Rent to Own” Real Estate Investment

1. “How to make PROFITS with Rent to Own” Real Estate Investment

2. Rent to Own/Lease Option • What is Rent to Own/Lease Option? • How to make money with it?

3. Who am I? • Crazy Thomas • Thomas Wong • Your rent-to-ownspecialist • A real estate investor with a process improvement background • Have done over 40 rent-to-own projects in the last few years

4. 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

5. 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

6. 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

7. 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!)

8. 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

9. Property or Tenant First • Tenant or Property First? (Chicken or Egg) • It is dependent on: • Market conditions • Investor preference • Investor financial capability

10. 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

11. 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)

12. The “Bag of Tricks” of Crazy Thomas • 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

13. The Rent-to-Own Process

14. 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… • Technologies: Iphone app, Youtube, Google adword

15. 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

16. 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

17. Tool to set Tenant Expectation

18. Explaining RTO Simplified

19. Explaining RTO Simplified

20. Explaining RTO Simplified

21. Explaining RTO Simplified

22. Explaining RTO Simplified

23. 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 progress

24. Opportunity to Participate with Crazy Thomas • Cash investors (get 20% return per year for 1- 3 year terms) • Mortgage partner (get >50% return per year) • RRSP 2nd Mortgage investor (get 14% interest only return per year) • Assign contract with confirmed rent-to-own tenant from Thomas • Ask Thomas to help you to structure your own deals • Let Thomas mentor you on doing rent-to-own deals

25. Need more Information • Call us at 1-866-878-6884 ext 1 or 416-806-9568 and talk to Thomas for more information • You can also email thomaswong@rogers.com • Check out our iphone app http://www.app.cat/crazythomas