When you are in the business of selling houses, there are a number of different exit strategies you might pursue. Each of these exit strategies has its own benefits and liabilities. You will have to carefully evaluate which strategy is appropriate for each property and each tenant. It could be that you have a number of strategies in play at the same time if you deal with a large volume of houses.
The four basic exit strategies are wholesale, land contract, lease option, and retail. Chances are you can make a considerable profit using any one of these strategies. The one thing you do not want to do is to end up being a perpetual landlord. The object is to sell your homes as quickly as is feasible.
Once a potential applicant visits a property, if he or she is interested in pursuing it, they can then fill out an application form. In some cases, a paper form works best-in others, it’s best if the applicant downloads a PDF from the company website and submits the form online. The more technologically inclined you are, the more likely it is that you will want to use online forms.
During the internal approval process, the applicant’s credit history, job service, length of employment, and income level are all looked at and scrutinized. From the credit score, you can determine where the applicant stands, financially speaking. We are not necessarily looking for an applicant with a stellar credit score; rather, staffers are just trying to determine if the worker will fit into the 12-month lease-to-own arrangement, land contract, or immediate financing.
Once a credit score is obtained, we can contact one of the financial institutions with which it has an on-going relationship. The mortgage broker then investigates the credit information and sends back notification about whether the applicant has been approved. Typically, the mortgage broker will offer an answer within 24 hours of receipt of the application. In some cases, applicants are using their own lending institutions and they’re already pre-approved, but it doesn’t usually work out that way.
While the process of reviewing potential applicants does take up some time and requires some money, it is not overly burdensome. And it is certainly worthwhile to screen potential applicants. Otherwise, you could end up with tenants who are not financially prepared to purchase homes. And your investments could be at risk as a result.