Lease Option Exit Strategy Explained | Credit Repair & Tenant Screening for Investors

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In this episode of the Investor Fuel Podcast, host Leo Wehdeking speaks with Paul Ritter, a seasoned real estate professional who specializes in lease option exit strategies, credit repair, and tenant screening. Paul shares insights on how he integrates these services to help real estate investors maximize their profits while ensuring that tenant buyers are well-prepared for homeownership. The conversation covers the importance of identifying red flags in potential tenants, the challenges of running a multifaceted business, and the significance of building strong relationships within the real estate community.

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Paul Ritter (00:00)
as a service provider for this industry, what I do is I try to create the ultimate lease option exit strategy. So if you’re selling houses right now, you’re turning and flipping them or you’re simply renting them.

there’s a large profit that you’re foregoing by not adopting the selling on lease auction exit strategy because you can get paid when you buy the house, you can get paid middle money like the difference in the rent and you can get paid the big money whenever you sell the house and you end up selling it for a lot more because you offer terms.

Leo Wehdeking (02:04)
everyone, welcome to the Investor Fuel Podcast. My name is Leo Wehdeking I’m your host today and I am joined by someone I’ve been looking forward to chatting with, Paul Ritter, who’s been making serious moves in the industry of real estate. Glad to have you here, Paul.

Paul Ritter (02:20)
Leo, thank you for having me today. I’m really looking forward to providing information to you and the community you serve.

Leo Wehdeking (02:26)
Yeah, actually, I think our listeners are really going to take something away from how you’ve been handling your real estate business, your investments and most of the stuff that you actually married with your real estate business, like for an example, ⁓ the credit repair, the screening and the profitable exit strategy that you have placed on. Am I right?

Paul Ritter (02:49)
yeah.

yeah, yeah.

Leo Wehdeking (02:50)
All right, perfect,

perfect. Now, let’s dive in, all right? And first of all, for the people that may not be familiar with what you’re doing with your world, can you give us a short version on what’s your main focus these days?

Paul Ritter (03:06)
Absolutely, Leo. So as a service provider to this real estate investment industry that I’ve been doing these services all the way back, still probably about 2012, actually some of the services go back even to last century, like the credit repair service. But

as a service provider for this industry, what I do is I try to create the ultimate lease option exit strategy. So if you’re selling houses right now, you’re turning and flipping them or you’re simply renting them.

there’s a large profit that you’re foregoing by not adopting the selling on lease auction exit strategy because you can get paid when you buy the house, you can get paid middle money like the difference in the rent and you can get paid the big money whenever you sell the house and you end up selling it for a lot more because you offer

So my focus is not all of that. My focus is the selecting the right candidate.

for the house, the one that can afford the house and the one that has a path to get their credit to where it needs to be.

Leo Wehdeking (04:08)
Exactly correct. And now Paul, in what markets are you operating in?

Paul Ritter (04:13)
I operate in all 50 states, both the screening company and the credit repair company I spoke of before. We do business in all 50 states. And by the way, you can divide them up. If you have somebody who’s already in your house who just needs credit repair, we do that. But if you’re looking to have somebody screened and then walked all the way through and given all the reports that you need to make an executive decision, a very good decision about who you put in your house, then I’m your guy.

Leo Wehdeking (04:39)
Alright, Love it. Now, something that actually caught my attention about you, it’s the way that you’ve been able to…

to have all these different areas, okay, that you apply to the real estate. So can you be a little bit more specific how you were able to merit, you know, the profitable strategy exit, the credit repair, the screening, and the real estate business? How were you able to put all of that together through, you know, the years of experience?

Paul Ritter (05:59)
my god, yeah, and the mortgages. I mean, when I’m an entrepreneur at heart, you know, that’s really where I, I, this all came from. So I work with a lot of real estate investor trainers were on the ran and I could throw out a bunch of names, but you know, Joe McCollum and many others, Chris pre-fontaine, but the way this came about and the uniqueness of my business, here’s what it does. Like right now you can go and you can go to trans union smart moves and do a screening.

Leo Wehdeking (05:59)
that you have.

Paul Ritter (06:26)
But you’re given very little information. They’re not going to figure out can you afford the house. They’re really they’re off our credit port, but they don’t tell you how to get the credit from where it is to where it needs to be in order to become mortgage ready. And they’re not mortgage brokers as well. So here’s the cool thing. You’re not going to pay a dime as a real estate investor. Everything I’m about to tell you, it’s all going to end up appearing in the show notes and you’ll have a way to register with us. And when you register, again, it’s free. The tenant buyer pays for my service.

It’s only 50 bucks a screening more on that later. But here’s the thing. What we’re doing is the credit enhancement piece of this. We do it unlike anybody else in the industry. What we’re going to do is we’re going to dispute all the negative things every time we do battle with the credit viewers. And therefore I can let you know how long they’re being in the service before they even start. In other words, I can give you an end date and now you can set them up for a one year or a two year lease option knowing they have a plan to get to where they need to be.

And finally, there’s a tracking mechanism behind all this, where you as a real estate investor can track their results and you can see how they’re coming along with the credit enhancement and also the debt-income ratio. It’s a blueprint. I give them a screenshot and they sign it at the end of this whenever you go to sign your documents. it says, basically, it says that they’re not going to materially change their income or their debt load in order to be able to qualify for a mortgage in a year or two from now.

So it protects you from a Don Frank type of lawsuit against you. So everything is thought out, souped and nuts, to help you as a real estate investor accomplish your goals, which is to effectively sell people homes and cash them out. Because you live in your community and you don’t want to have to go to church or see somebody at a store or know that they were unable to get to where they needed to be from a mortgage perspective.

Well, I’m the guy really to help you and them get to that place.

Leo Wehdeking (08:20)
Wow, that’s actually not easy, especially in this climate nowadays that interest rates are going up. Sometimes they go down. ⁓ But, you know, that’s actually bringing me one question that I also want to ask you. What’s been the key to keeping your business? Because your business is not only real estate. You just mentioned yourself. You have like three other areas that you work.

Paul Ritter (08:29)
Cough

Leo Wehdeking (08:46)
along with the real estate business. So have you been able, how is Paul Reader able to run that business smoothly? What’s your recipe Paul?

Paul Ritter (08:59)
Many years of expertise and really just putting these pieces together because you have to have the credit repair in and of itself is its own entity, its own business. But when you tie it together with the screening and then we offer an executive summary, that executive summary, if I were just to look at the report, actually we’ve generated reports that are 100 pages long about should you make a decision on this person or not.

Leo Wehdeking (09:00)
Hahaha

Paul Ritter (09:58)
go right to the executive summary. I talk with every one of these people that I do these screenings for. I talk with them for an hour on a Zoom call and I go over these numbers with them and I have them take screenshots along the way. So by the time they come back to you, they are so thankful that they now understand the process because they talk with somebody who understands real estate investor terms and answered many of their questions. So I’m not gonna set your price.

I’m not going to negotiate your deal out for you, but I will know within the framework of, you know, of their income and their credit, whether or not they can be a viable candidate for that particular house. And even if they have to walk outside of that house, let’s say, for example, someone’s trying to qualify for a $500,000 house with a $3,000 a month income, it’s more house than they can afford. Even if we have to walk outside of that, I give them advice as to what they can afford. And then we can even

look for a different house for them. So our system is here to help you get more tenant buyers because when people don’t qualify for houses, you’ll have a buyer’s list that’s going to help you get better tenant buyers and people that understand the process along the way.

Leo Wehdeking (11:11)
Okay, okay, all right. So that’s actually very good, man. Very good, very good stuff. Now, Paul, I know that every operator has a moment where things got real, maybe a deal that went sideways or didn’t go as planned. right? Do you mind, you know, sometimes that maybe you had to pivot real fast. All right? Do you mind sharing one of those moments?

Paul Ritter (11:32)
sure, you know there are red flags and through the doing this business and experience that comes with it, you learn to look for these red flags that people, I want to have everyone cash out. I want to have everyone put their name on the title to the property. However, yes, there are times when people fail. One of the main red flags I’ve learned to look for is inability to save.

So if they come across their down payment, their non-refundable option deposit by the either inheritance or a tax refund, that basically, that should tell you something that they haven’t been able to save. And if they’re living paycheck to paycheck, you know, they can’t afford the screening or they complain about the $50 that they pay or even the credit repair, those should be red flags. So people should come into these transaction eyes wide open, knowing, you know, what they, what, ⁓

buying a house is not cheap. know, even if you’re buying an on lease option, you know, that non refundable option deposit, you want to be able to cash people out because in a lot of these deals, the big money is on the backside, the big money is whenever you cash them out and you get that 20, 30, $50,000 check whenever you’re selling the house. That’s really where you know, this the end game here. That’s what we’re all playing for. So things I’ve learned and an answer to your question, Leo, you know,

Leo Wehdeking (12:43)
Exactly.

Paul Ritter (12:51)
deposit. That’s one thing. You know, the framework of, of, you know, whether husband and wife or are they boyfriend and girlfriend? You know, how long have they been together? What type of jobs do they have? There’s things you can pick up one in the background check that lets you know whether or not they’re going to try to turn your house into a meth lab. So you need to be aware of these things. And, know, the hour long interview that I’m doing with them and the fact that I’ve done so many of these, you know, I can offer my feedback to people and let them know.

you know, as an investor myself, would I rent or lease option to these people as well.

Leo Wehdeking (13:25)
Exactly, you know and that’s the kind of stuff that people actually don’t talk about enough Sometimes maybe they don’t know about the topic But I think you know that the way you’re doing it That’s what separates the folks who just dabble from the ones who actually stay in the game for long term Okay, it’s just you know basic stuff knowing what you’re doing knowing

Paul Ritter (13:46)
you can go broke

quickly if you make some bad decisions. It’s not a bad decision, you know, and you also start to think, you know what, pushing a broom at the high school might not sound so bad. But that’s this industry, if you treat people right, you know, and you understand your business and you know what to look out for, this can be extremely profitable. It’s a wonderful business.

Leo Wehdeking (13:50)
Hahaha

Yeah, it is, it is, it is. Now, let me ask you something, What are you most focused on? Solving ⁓ or scaling next?

Paul Ritter (14:58)
Wow, that’s a really interesting question. I would say I’ve been problem-solver all my life. I love solving problems. Good chess game, love it, you know. scaling would be, I would love to get the word out more and I’d love to be able to do more business. Right now we’re small but mighty. I mean, we’ve done, I don’t know, I probably have a couple hundred people in the credit repair business and each month we’re turning over another

40, 50 screenings or even more, but I’d love to see this thing 10x from there. You know, I would easily staff up because we have all the structure in place to grow this. You know, we got all the database stuff and the software to do all the credit repair and to do everything that we need. I think I have the problem solved. Of course, my wife might say something different, but I think scaling would be really worth it.

I would like to focus my attention. Good question, Leo. I appreciate that.

Leo Wehdeking (15:52)
Okay, okay on scaling so you’re definitely You told me already that you like to solve problems so that won’t be you know, like maybe your main goal right now So probably scaling is the one that you’re looking To grow right now. Am I right?

Paul Ritter (16:05)
absolutely.

Yeah, yeah.

Leo Wehdeking (16:06)
Alright, alright. Now, Paul, I know that a lot of people listening are either earlier in their journey or they’re just looking to level up and I think they will benefit ⁓ from hearing this. Okay. Now, when it comes about building relationships and growing your network, what’s made the biggest difference for you?

Paul Ritter (16:16)
Yeah.

Well, I work with a lot of real estate investor trainers. Like Investor Fuel, I’m really excited about this relationship I’m ushering in with you guys. the way I’ve grown my business up to this point in time is through the real estate investor trainer community. I can’t thank Ron Legrand and Afis, Papa Ron, a lot of people. So there is…

The way I’ve scaled to this point in time is mainly through that. I’ve dabbled a little bit with the mortgage business. Matter of fact, actually now I’ve got my mortgage license. I can do mortgages in all 50 states. And many people find that to be useful to have the credit enhancement person work with them because I can keep my finger on the pulse of, or the heartbeat of the score.

in conjunction with interest rates. And we all know interest rates with what’s going on now, they’re fluctuating quite a bit and they’re set to even come down more. So wouldn’t it be helpful to have somebody who is looking at your score and can pull the trigger at the right time to get to the best rates and terms and fees combination? And that’s really where I come from. So I’m not sure if that really answered your question head on, but is there anything else I can add to that?

Leo Wehdeking (17:35)
Yeah, it does. It

does. Yeah, it does. I will simplify it just a little bit by, you have built over these years, you have built very good relationships with with your investors and with the people that you have worked in. That’s what I would say.

Paul Ritter (17:37)
Okay.

Oh, and the people I’ve worked with. mean, Leo, you don’t know how many people come back to me and say, you know what, I couldn’t buy a toaster on credit with tears in their eyes. And they say, now you’ve got me into a house. Thank you. Thank you. Thank you. So I’m that cornerstone, really. And I’m that education that gets them there. So I love to share myself. And with all the real estate investors that I work with, Leo, they all got my personal cell phone number. So that’s the kind of business that I do.

Leo Wehdeking (18:17)
Exactly, and that’s…

Paul Ritter (18:18)
I’m

here for the community. Go ahead.

Leo Wehdeking (18:20)
No, no, yeah, I was just going to say I was going to add something and that’s something that you cannot fake Okay, when you told me right now that most of the investors that you have worked with they all have your personal number That means a lot. Okay, because if you want to reach out to them You know that you’re going to call him directly and not going to reach out maybe an automated voice machine or maybe I don’t know an assistant

Okay, so that’s huge. That’s big, especially nowadays where relationships are everything. Okay, you mentioned that the way that you’ve been growing, it’s by, you know, ⁓ being part of communities. Am I right? And helping communities. So that’s actually very good. That’s actually very good. And it did answer my question.

Paul Ritter (19:00)
Yeah. Yeah.

Yeah, got

to an interest in that community and then you need to speak their language. So I come going to a lot of these training sessions with the real estate investment community. I’ve had booths, you know, throughout this industry. So I’ve listened to all the real estate investors. I understand the issues that they face. And I sat down and solved a lot of these problems. So, you know, really what the real estate investor wants is

Is this person going to turn my house into a meth lab or am I going to actually see them at that second closing table, the one where they put their name on the title to the property? First closing tables where you give them the keys. Again, we’re talking about a lease option exit strategy here. Am I going to see them there? That’s what they’re concerned. You want to see the people there and they want to do good in the community at the same time, make a very profitable deal. And it’s all there for them as long as they have the framework of being able to select that right person going in.

Leo Wehdeking (19:46)
Exactly.

Paul Ritter (19:59)
And knowing that you have someone like me who talks to your tenant buyers for an hour, you know, and gives you my feedback at zero cost to you. I mean, that’s, and you say, well, Paul, how do you do that? How do you do it with zero cost to the real estate? Because the tenant buyer pays for the screening. The tenant buyer pays for their own credit repair if they go that route. And sometimes I advise them, they don’t even need credit repair. Oh, you just need to build credit. You need to work on your age of credit mix and credit balance, limit ratio.

all the relevant criteria that contribute to your score. I go through all that stuff with them. you know, sometimes we just, there’s a lot of free advice.

Leo Wehdeking (20:33)
Exactly, All right, that’s very good Paul. Now before we wrap up, all right, if someone wanted to reach out to you, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach out to you?

Paul Ritter (20:47)
Well, let’s go ahead and put it in the show notes here. There’ll be a registration link. So when you register as a real estate investor with us, it’s a very simple form. It’s going to ask you for your name and your email address and your phone number, like two phone numbers, the one you want me to contact you on and the one you want the other, the community to contact you on. So once you fill out these little six little fields, it generates a link for you. And Leo, this is so cool.

So now you have your link or QR code, however you want to handle it. So now you give that to your tenant buyers. now you have a professional application, it costs me tens of thousands of dollars to develop this application. It has logic in it. It actually expands if there’s more than one buyer and it knows what questions to ask. Don’t ask for a down payment if it’s a rental only. So all this really cool applications now go to your application.

So you’re going to get that value. So you look much more professional. That application comes into me. We give you a copy of it and we do all the background work. So think of it this way. We’re really you’re outsourcing the one small piece of this, which is the task taking the application for you. And with that we’re providing you answers, or at least we’re giving you nice executive summaries to make your decision on who you’re going to put into the house. So and again, it doesn’t cost you anything.

Why are you getting it for free? Because the tentifier is paying me directly.

Leo Wehdeking (22:09)
Okay, all right cool cool. Well Paul perfect listen, yeah

Paul Ritter (22:11)
So to answer your question, let’s put it in the shell notes. Yeah, let’s put it in the shell

notes out of contact. May as a registration form. Go ahead.

Leo Wehdeking (22:17)
OK, you can mention them over here on the video, it doesn’t matter.

Paul Ritter (22:21)
It’s applied on pre-qual team slash register. But anyhow, again, I’ll put it it’s a link So I’ll put it in the show notes and if we can get a QR code in there I’ll put that in there as well. So it’s real simple once I do that we’re gonna get that link and then I’ll even give you like a bonus link to for directly to my calendar if you want to do like your own credit repair if you’re real estate investor You’re just starting out and you did repair your own credit. We got special pricing for you, too So we knock a lot of there’s a lot of discounts for you

Leo Wehdeking (22:29)
Okay. All right.

All right, all

right. All right, we’ll do, we’ll do. Well, Paul, listen, I really appreciate your time, your story, and your perspective. OK, we need more people in this space who are actually doing it the right way. Thanks again for being here. And for those of you just tuning in, all right, if you got value from this, make sure you’re subscribed. All right, we got more conversations coming with operators just like Paul Reader, all right, who are out there doing

real businesses. Until then, see you in the next episode.

Paul Ritter (23:17)
Thank you, Leo.

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Investor Fuel

Lease Option Exit Strategy Explained | Credit Repair & Tenant Screening for Investors

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