- Joined
- Apr 9, 2009
- Messages
- 217
I know RLG advised against renting to own back to someone in arrears.
Has anyone here done it ? Have you had success with it?
Has anyone here done it ? Have you had success with it?
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Rent to Own Back to A Seller In Arrears
- Thread starter CarrieKoch
- Start date
It depends...
If your buying the house creatively, say a sandwhich lease situation, the concern is if the deal was ever challenged in court you probably wouldn`t stand a good chance of walking away with a win. Obviously such a deal can be very confusing for a judge and could appear to be a scam of sorts.
As well there`s usually a reason why they are in arrears and perhaps they just can`t afford the property.. My concern is 6 months down the road once the crisis is over it`s not hard for folks to forget that you helped them and start to remember how much lower their payments were before you helped.. Gratitude can quickly turn to resentment.
Now if you can buy the house traditionally and rent to own it back to them it can work, but I would avoid anything "creative".
If your buying the house creatively, say a sandwhich lease situation, the concern is if the deal was ever challenged in court you probably wouldn`t stand a good chance of walking away with a win. Obviously such a deal can be very confusing for a judge and could appear to be a scam of sorts.
As well there`s usually a reason why they are in arrears and perhaps they just can`t afford the property.. My concern is 6 months down the road once the crisis is over it`s not hard for folks to forget that you helped them and start to remember how much lower their payments were before you helped.. Gratitude can quickly turn to resentment.
Now if you can buy the house traditionally and rent to own it back to them it can work, but I would avoid anything "creative".
- Joined
- Apr 9, 2009
- Messages
- 217
No defintely I would buy from them. They would use the difference from sale-mortgage-arrears as a deposit. Their rent to own payments would actually be LESS then their current mortgage only payments as they are paying a very high rate. They had a major health crisis and wife was laid off at the same time. Seem to be decent people who got caught. QUOTE (jseib @ Aug 4 2010, 08:37 AM) It depends... If your buying the house creatively, say a sandwhich lease situation, the concern is if the deal was ever challenged in court you probably wouldn`t stand a good chance of walking away with a win. Obviously such a deal can be very confusing for a judge and could appear to be a scam of sorts. As well there`s usually a reason why they are in arrears and perhaps they just can`t afford the property.. My concern is 6 months down the road once the crisis is over it`s not hard for folks to forget that you helped them and start to remember how much lower their payments were before you helped.. Gratitude can quickly turn to resentment. Now if you can buy the house traditionally and rent to own it back to them it can work, but I would avoid anything "creative".
Hi Carrie,
Just a couple of things you need to buy the property at fair market value if you are keeping the renters in. Typically we use at least 5% down payment for properties like this and we do a lot to ensure they will be able to pay now when they have not been in the past.
As well pull title on the property to see exactly what they owe. You do not want to get to close and see that they have no money for a down payment.
Lawyers fees and penalties can not be nice.
Regards,
Just a couple of things you need to buy the property at fair market value if you are keeping the renters in. Typically we use at least 5% down payment for properties like this and we do a lot to ensure they will be able to pay now when they have not been in the past.
As well pull title on the property to see exactly what they owe. You do not want to get to close and see that they have no money for a down payment.
Lawyers fees and penalties can not be nice.
Regards,