QUOTE (donksky @ Jan 10 2008, 08:35 PM) thanks very much, Mark & Bob - I can see that you use RTO strategies - I`ll study your websites/logs for the numbers/strategy.
I agree that the trend is for the tenant/buyer to not complete the deal. But in the model we use, there is strong encouragement for the tenant to complete the deal. Over the 2-3 years of the deal they can gain $20,000 or more in credits to be used only toward a purchase down payment. One of the ways we do this is by taking a good sized initial deposit, say $6,000 to $10,000 (depending on the value of the house) and this is only returned if they buy. Many, though not all, of our deals also have a $200/month incentive credit that encourages them to stay in the deal and pay timely rent.
That said, you are correct in that many of them do have money issues and sometimes get into trouble on the way through.
Our working assumptions when we started were that the `norm` is 50% conversion rate (eventual sale to the tenant) and we were planning for 70% or better. In the ten deals that I have worked in the past year and a half, one has gone to successful conclusion, one has gone to evicition, and one tenant just walked out. The rest are all still in play.