- Joined
- Aug 26, 2010
- Messages
- 380
I have developed a system using mortgage brokers to pre-screen qualified rent to own candidates for a tenant first model, and a realtor to work with the candidates to find houses. There are 3 qualified candidates at this point. So far I have only done property first rent to own and had 2 exits/sales last year but the challenge we found with the property first model for RTO is finding the RTO buyer, with a closing ratio as little as 1/60- to 1/70 contacts.
There are some larger rent to own operators on myreinspace. We are looking to invest approx 300K in capital, and doing 6-7 rent to owns focusing on starter homes using the tenant first model with the broker pre-qualifying the candidates and then the realtor touring them around to find houses is one of our options vs finding a single larger multi-family deal.
What are the major challenges in building a significant rent to own business? The big issues seem to be length of time invested in each small deal versus a single larger deal plus the access to financing ie banks want large deals, not multiple small deals.
Is rent to own a strategy mostly suitable for small operators looking to jump to the next level or is it a good choice to build a business placing significant capital like you can with larger multi-family? I like the cash returns of RTO but it seems such a management intensive operation I'd like to hear how the other larger RTO operators are doing it.
Thanks in advance for input!
Tris
There are some larger rent to own operators on myreinspace. We are looking to invest approx 300K in capital, and doing 6-7 rent to owns focusing on starter homes using the tenant first model with the broker pre-qualifying the candidates and then the realtor touring them around to find houses is one of our options vs finding a single larger multi-family deal.
What are the major challenges in building a significant rent to own business? The big issues seem to be length of time invested in each small deal versus a single larger deal plus the access to financing ie banks want large deals, not multiple small deals.
Is rent to own a strategy mostly suitable for small operators looking to jump to the next level or is it a good choice to build a business placing significant capital like you can with larger multi-family? I like the cash returns of RTO but it seems such a management intensive operation I'd like to hear how the other larger RTO operators are doing it.
Thanks in advance for input!
Tris