My Application for “Terms Deal” Buyers [DOWNLOAD FREE]
I have an awesome Swipe & Deploy goody!
Hey, JP here, with another one of our most useful and time-saving shortcuts.
It’s an application that I’ve had in my bag of tricks for a while — and it can be used for not 1 but 2 types of terms deal scenarios.
Scenario #1: A deal/ property that I want to sell through an owner financing transaction. So, I'm looking for somebody on the other side of that deal to owner finance it from me. I’d use the application to filter and screen them.
Scenario #2: A lease option deal. Which is another kind of terms deal.
So, you’d use this application when selling a land contract or owner financing, or if you're selling through a lease option — this application is suitable and has been used in both of those scenarios in my business in years past.
Because the majority of my deal-making has not been focused on terms deals on the selling side, I definitely keep this application handy. It’s been super useful.
And, the reason it’s so helpful is because it was created from the sage wisdom of mentors of mine who are highly experienced and proficient in doing terms deals.
So, this is a compilation of all that awesome that I'm handing off to you at no cost — yay!
But I’ll even do you one better…
Not only will you get to swipe and deploy this application below, but I’m going a level deeper into the details in an informative video I created about it. It’s short and sweet, but oh so helpful.
I’m telling you, this application is a great resource and time-saver… and can help you work more efficiently.
Alls you gotta do now is watch my video below, and then download this awesome swipe and deploy application, also below!
Press play, friends…
Hey, guys, JP again… back with another Swipe & Deploy. It's where you get to swipe our stuff and deploy it in your own business. We share documents and checklists and marketing pieces and contracts and whatever the heck you ask us for. We try to serve it up for you fresh, hot, and tasty.
So I recently had someone ask some questions, an insider asking us some questions about lease options and owner financing and that got me thinking, you know, right now, today, my business is focused almost exclusively on the quick-turn wholesaling business. But I have done some lease options and owner financing in the past, and I have some of the documentation that we've used for that side of the business.
So I thought I'd share one of those documents with you today that might be a helpful shortcut for you… it's the application that we use for either tenant buyers, if we're dealing with a lease option situation or people who are basically applying for us to be the bank and owner finance a property to them.
So let's start with our all important disclaimer, and that is that I am providing you with this form out of the pages, literally, of my own business. But it has been proven to work for me, not necessarily for you. It's being provided as-is without any warranty of any kind. And that means that use it at your own risk, get it checked out by your professionals before you use it in your own business, your own legal professionals, and that kind of thing. Okay? All right, so standard disclaimer, we always have to give that, especially when we're giving you guys forms and documents, and hopefully, you take that to heart. So let's move in.
Really, this is not like a super magic document. It's an application. But I will walk through and explain a few elements that I can just imagine… there might be a little bit of a disconnect if you're not used to this side of the business as to why exactly it's here. Okay?
So first of all, as you can see, please submit $20 for application processing fee. That's what it costs us to actually get a background check done and a credit check. We can get it super duper cheap here. Might cost you more, might cost you $35, might cost you $50. I recommend whatever your actual cost is… that's what you charge them and it's totally non-refundable, and you explain to them, this is our cost for doing it, and that's just the way it is. Okay?
I don't personally see this as a profit-making venture. Some people say charge $100 even if it costs you $50 or whatever. I just don't think that's needed. And this is not how I'm trying to make money. Okay?
So obviously you want to start off by getting them to put their full name, their social, and they're kind of looking at this hopefully as homeowner in training or actual homeowner type of thing, right? If your owner financing the house, you're going to be the bank and they're going to own it or they're going to be going to be under contract for the deed. If they are going to lease option it from you, then they are future homeowners. But they should see themselves as homeowners and training now. And this is the level of information that you get when you're applying for a house.
Obviously, home phone, date of birth, marital status, dependents, ages, their current full address, how long they've lived there, and at their previous address, name and phone of the previous two landlords, the previous or current landlord is not all that important to me because if they're a bad tenant that current landlord may very well lie and say, oh, they're great if you call them for a reference simply because they want them out of his house. But if you call the previous landlord before that guy or girl, and you ask what kind of tenant they were, now you're going to get the real nitty gritty. That's why I always ask for two landlords. I do that on my rental applications as well.
And then this question, what is your attorney's name? Why am I asking that? Well, I have found that simply asking this question can bring up interesting conversations. When they come to it, a lot of people will simply say, I don't really have an attorney. And you say, okay, that's no problem, just put N/A. And what that tells me if they don't have an attorney is that they're not particularly litigious-minded. They don't have somebody that they look at as their attorney because that's not really a part of their thinking or their world very much.
Now if they just put down a name, then I'll just ask for clarification. So what kind of attorney is your attorney? And they may say, well I'm part of prepaid legal and this is just the name of the local representative for prepaid. Okay, no problem. Or they might say, oh, that was my divorce attorney that I worked with when my last divorce or whatever it is. You can just, if they put a name, ask them what kind of attorney is this? And whatever they say, just listen and kind of read between the lines. And this will help give you some insights into the way they think and the type of person they are. Little pro tip there.
Okay, employment information, obviously, name and address of the employer or if they're self-employed, what their company name is. Be very cautious with people who are quote-unquote self-employed. A lot of times that means unemployed, years on the job, type of business, title/position, full physical address of location where you actually work, not like just the regular business address, wherever that happens to be. You want to know where they actually work physically, employer/offices, phone number, if employed in current position less than two years, or employed in more than one position, complete below. And so if they have an additional job, then they can put the information there.
If they haven't been at their job at least two years, then it's not a good sign. And you want to at least see that they had some longevity at the previous job before that you can't necessarily control if they recently changed jobs. But what you want to do is find out do they have a pattern or a trend of not staying at jobs very long because that's going to affect how well they are going to be able to make payments to you that they agreed to make. More stability is better, obviously.
Okay, so let's just skip a bit down to here. Monthly income, asset expense information, net monthly income. That's the take home from their employer or their business. And you should clarify to them this is your total take home, what you actually get on your check. And yes, it can include child support if they get that regularly.
If it comes in like clockwork, it can include basically anything that comes in like clockwork can be included here under other income. But this line should be what they get from their job or jobs. Okay. Other stuff here, if it's not consistent, don't put it here. And then if the source obviously is important, if it's a child support payment or alimony or whatever it is.
Total monthly payments to other debtors or creditors. And you explain to them simply it's just a company policy. And those are magic words by the way. It's just company policy. That way you're not the bad guy, it's your company. It's just company policy that we have to make sure that everybody who is in our properties has a certain debt to income ratio.
It's the same when you fill out an application for a mortgage. So for the same reasons we have to know what your monthly obligations are to all of your credit cards, any other debts, any car notes, any type of monthly payments that you're on the hook for. We got to know what they are. So you want to have that total in there and you internally want to make sure, in my opinion, that their debt to income ratio is such that they can easily afford to make the payments they're going to agree to make to you without it being a stretch when still leaving them margined. I believe in margined.
You want to have them put the total debt that they have that's over nine months old because you want to know do they carry a lot of debt on a regular basis? It just weighs into your assessment of them amount of current monthly rent or mortgage payment. How does what they're going to be paying you compared to what they're already paying? And if they've been paying that for some amount of time. That could be a good indicator for you. Obviously, they're paying $900 a month in rent and they're signing up to pay you $1900 a month rent. Well there's a big discrepancy and you need to figure out if they can really afford it.
Number of people in household I would clarify this is the people who are going to be living in the house. If you have relatives who are extended family they're going to be living with you. They're in the household. However, if you have relatives like maybe a child but the other parent has custody, well they're not in your household.
Amount of proposed monthly note that you can afford, including taxes and insurance if applicable, have them tell you. Now here's the thing. This application is suitable for a type of business where you either have a specific house and you're trying to get applications to owner finance or at least purchase a specific house. Or let's say you don't have a specific house in mind yet. But these people you're kind of known for the deal hook-up. They come to you because you market yourself as having access frequently to properties that are able to be owner financed or rent-to-own. There's whole business models built around that idea.
So if that's you, then you're going to want to get people to submit an application before they even know exactly what property they're going for because you're going to help find them and match them up with one. That's where these questions become relevant. When there isn't a specific property in mind yet, you want to know what is the amount of the proposed monthly note that you can afford including taxes and insurance. So whatever they think they tell you they can afford, get them to pony it up right there also how much do you have available for down payment. Get them to tell you.
If the home is not already selected… briefly describe the qualities of the home you're looking for and of course they can add an extra sheet on if you want them to. We've got this kind of succinctly laid out to be one side of one sheet of paper but you can always expand it if that's not enough room, geographical area or areas of particular interest to you, right? So if that's your business model and you're going to go look for opportunities that might match these buyers needs, then that's information obviously that's relevant for you to have.
Total current balance of checking and savings accounts and stocks and bonds. You just explain to them. Again, I'm not trying to pry into your business but in a sense kind of am because this is the part of the process of becoming a homeowner is having these kind of things assessed along those same lines. Cash value of any life insurance policies, any other real estate they own, the value of that retirement accounts, net worth of any business owned. Basically, the more and better they put here, the more they're worth and the more perhaps bankable they are for you. Or reliable. Okay?
Last but not least, declarations. If they answer yes to any of these questions, they have to attach a sheet explaining why. Alright? Outstanding judgments if they've declared bankruptcy in the last seven years. Ever been in a foreclosure party to a lawsuit? Obligated to alimony or child support? Borrowing part of their down payment if it's going to be non-owner occupied, and if they're not a full US citizen. Those are all these things that you need further explanation in writing. Okay?
And then a final acknowledgement agreement. So again, not a magic piece of paper, but a good starter for you to use as an application and hopefully just walking through and kind of explaining the thinking behind some of these pieces will help you understand which parts apply and which may not apply, depending on what your particular approach to the lease option and or owner finance space is.
All right, so there you go. Swipe and deploy. Download it. There's a download link somewhere here on the page. You can just add it to your stockpile of stuff.
By the way, check out all the other swipe and deploy up at the top of the page here. Just click on this link, swipe and deploy. And check out all the awesomeness that we have stockpiled in here for you over the years. That's right, years, literally. And leave us a comment below. Tell me what else you're into. What would you like us to maybe give you in a future swipe and deploy lesson? We love to try and be accommodating, and if we can, we'll do so, alright?
So if there's anything you got a hankering for, whether it's an article on a certain topic or a form or document have or maybe a template for a marketing piece, whatever it is, let me know. All right?
Thanks guys. Thanks for tuning in. JP, out of here.
Application for “Terms Deal” Buyers: Get Mine Now 🙂
Well, now that you better understand the components of this doc… I hope you level up your real estate investing game.
Ready to just grab mine for your own bag of tricks?
Awesome, just remember: You might want to have a professional look at this doc and review it before you go start deploying it in your business…
Step 1 ⤸
“Like” our Facebook page please?
Step 2 ⤸
Just leave a comment below sharing your honest feedback on the application for “terms deal” buyers template I'm freely sharing with you. Whatever you think after hearing my thoughts behind it in the video above. Good, bad, and anywhere in between. Seriously.
Alternately, I’m also interested in hearing anything else (another resource or tool) that you’d like us to share in a future “Swipe & Deploy” like this. Do tell.
Step 3 ⤸
Then Chuck Norris will hand you over my template.
Totally serious. Just try it. 😀
Oh, and BTW…
In case you don’t know already, there’s an entire “Swipe & Deploy” goodies category over here—which we’re always adding to, and currently gives you everything from an agreement for subcontractors to a contractor lien agreement and from an affidavit of equitable interest to a transfer property letter and a simple real estate contract.
Plus, a tasty option agreement, a letter of intent template, MLS keywords, a seller phone script & voicemail script — even some marketing goodies like one of our favorite motivated seller letters and seller postcards too.