rent to own scam?

[NeilUttamsingh]

Hi REIN Members,

I am hoping that some of you can shed some light on my situation.

I am currently advertising a property for rent on www.kijiji.ca.

I received a response from a `real estate investor` who asked me if I would be wiling to do a lease with him, with an option to buy later on...

I asked him for clarification, and if he was looking to do a rent to own.

When asked this, he said `yes, I am looking for a rent to own`.

He says that he is a real estate investor and that he wants to rent my property for 12-18 months and then eventually purchase it. He says that he would be personally renting the property, and then personally purchasing it.

Something just seems a little bit off with his proposal and I just quite can`t put my finger on it...

Am I missing something here?

Please advise.
Thanks,
Neil

 

[hazed]

Hi Neil,
I do lease options, also referred to as rent-to-own in B.C. This does not look unusual to me at all. When I am looking for particular properties for my clients, I will check the real estate ads on various sites and ask if they would consider doing a rent-to-own. The fact that he wants to lease it personally and then purchase it personally may be he has found something that he actually wants, but knows he doesn`t yet qualify for a mortgage. This will buy him the time, but get him into the property at a set price now. It is actually a great way to buy a home! While on the lease, the owner is still responsible for major repair costs and property taxes. This way the tentative owner can `test drive` the home and decide if they want to purchase it at a later date. They are not obligated to purchase the home, but will lose their deposit and all monthly payments paid to date. I wouldn`t write this off as a scam just yet.

 

[JohnS]

This is something I don`t know a lot about, but aren`t the vast majority of rent-to-owns done by people trying to buy their own home? Meaning, they`re not real estate investors, but people whose credit is poor so they have problems buying their own home.

The fact that he said he was an investor but then said he was trying to get his own place sounded weird to me, but I could easily be way off-base here.

Have a good one!

JohnS

 

[jarrettvaughan]

QUOTE (NeilUttamsingh @ Mar 12 2009, 07:40 PM) Hi REIN Members,

I am hoping that some of you can shed some light on my situation.

I am currently advertising a property for rent on www.kijiji.ca.

I received a response from a `real estate investor` who asked me if I would be wiling to do a lease with him, with an option to buy later on...

I asked him for clarification, and if he was looking to do a rent to own.

When asked this, he said `yes, I am looking for a rent to own`.

He says that he is a real estate investor and that he wants to rent my property for 12-18 months and then eventually purchase it. He says that he would be personally renting the property, and then personally purchasing it.

Something just seems a little bit off with his proposal and I just quite can`t put my finger on it...

Am I missing something here?

Please advise.
Thanks,
Neil

I had a rental ad on Craigslist a couple weeks ago and received an email from someone that was interested in an RTO. I noticed that his email address ended in @rentoown.com or something of that nature. Anyway, it lead me to his website which was a rent to own site.

I emailed him back and mentioned that I noticed his email address and asked him about his RTO company. I also told him i was very interested in an RTO and that i can provide him more information etc etc. I never heard from him again, even though I answered his question with a positive answer. I thought it was odd that he was asking for a RTO when he had and RTO company. I thought maybe he didnt email me back becuase I noticed his website.......I chalked it up to a scam email.

Maybe this is the same guy???

 

[TodorYordanov]

Hi Neil, I get the same call almost every time I have a vacancy to fill. I answer that I am not interested.

 

[Mjay2009]

QUOTE (NeilUttamsingh @ Mar 12 2009, 08:40 PM) Hi REIN Members,

I am hoping that some of you can shed some light on my situation.

I am currently advertising a property for rent on www.kijiji.ca.

I received a response from a `real estate investor` who asked me if I would be wiling to do a lease with him, with an option to buy later on...

I asked him for clarification, and if he was looking to do a rent to own.

When asked this, he said `yes, I am looking for a rent to own`.

He says that he is a real estate investor and that he wants to rent my property for 12-18 months and then eventually purchase it. He says that he would be personally renting the property, and then personally purchasing it.

Something just seems a little bit off with his proposal and I just quite can`t put my finger on it...

Am I missing something here?

Please advise.
Thanks,
Neil

 

[Mjay2009]

Hello Neil, I do not think this is a scam, just someone trying to get information and research how you are structuring your projects.

QUOTE (NeilUttamsingh @ Mar 12 2009, 08:40 PM) Hi REIN Members,

I am hoping that some of you can shed some light on my situation.

I am currently advertising a property for rent on www.kijiji.ca.

I received a response from a `real estate investor` who asked me if I would be wiling to do a lease with him, with an option to buy later on...

I asked him for clarification, and if he was looking to do a rent to own.

When asked this, he said `yes, I am looking for a rent to own`.

He says that he is a real estate investor and that he wants to rent my property for 12-18 months and then eventually purchase it. He says that he would be personally renting the property, and then personally purchasing it.

Something just seems a little bit off with his proposal and I just quite can`t put my finger on it...

Am I missing something here?

Please advise.
Thanks,
Neil

 

[TerryKruse]

I can remember taking a real estate investment course before I joined REIN. They recommended Rent to Owns as a means of starting investing. They get the home under contract and then rent it to someone else.

Not necessarily a scam but you would want to make sure you know who is moving into the property.

Terry Kruse

 

[andrewsimpson]

QUOTE (TerryKruse @ Mar 13 2009, 07:49 AM) I can remember taking a real estate investment course before I joined REIN. They recommended Rent to Owns as a means of starting investing. They get the home under contract and then rent it to someone else.

Not necessarily a scam but you would want to make sure you know who is moving into the property.

Terry Kruse

 

[andrewsimpson]

QUOTE (TerryKruse @ Mar 13 2009, 07:49 AM) I can remember taking a real estate investment course before I joined REIN. They recommended Rent to Owns as a means of starting investing. They get the home under contract and then rent it to someone else.

Not necessarily a scam but you would want to make sure you know who is moving into the property.

Terry Kruse

I also took a course through Russ whitney. They teach the "sandwich lease option" Where said real estate investor would essentially be a middle man between you (the owner) and someone else that he would be doing a lease option with. He makes money in three ways.
1)By collecting a higher option price from his client than he would be paying you.
2)By collecting a higher rent from his client than he would be paying you.
3)By collecting a higher down payment from his client than he would be paying you.
The idea, for him, is to have a simultaneous close so that you sell to the middle man at the same time that his tenant would excercise their option to buy with him. This way they never go on title, never have to qualify for a mortgage, and if they have the client lined up with a big enough down payment they also don`t have to make a down payment either.
A very convaluted approach to investing in real estate. Probably sells more courses than anything. I am not saying that this is what your guy is up to, maybe his story is true. Either way, if you are to further pursue things with this person, due diligence is key. Make sure that this would fit for your goals as an exit strategy

 

[EdRenkema]

QUOTE (NeilUttamsingh @ Mar 12 2009, 09:40 PM) Hi REIN Members,

I am hoping that some of you can shed some light on my situation.

I am currently advertising a property for rent on www.kijiji.ca.

I received a response from a `real estate investor` who asked me if I would be wiling to do a lease with him, with an option to buy later on...

I asked him for clarification, and if he was looking to do a rent to own.

When asked this, he said `yes, I am looking for a rent to own`.

He says that he is a real estate investor and that he wants to rent my property for 12-18 months and then eventually purchase it. He says that he would be personally renting the property, and then personally purchasing it.

Something just seems a little bit off with his proposal and I just quite can`t put my finger on it...

Am I missing something here?

Please advise.
Thanks,
Neil

Neil the same type of deal was proposed to me when I was struggling with my vacancy in Hamilton. One of the things I did not like about what this person was proposing was I would remain on title while they controlled everything. They seemed to be fishing for a desperate vendor and were very condescending. My standard answer was come have a look at the property and we will talk, they didn`t seem interested in that only in `helping` me out. Very condescending and generally a waste of time and phone minutes.

 

[AndyLuchies]

Follow your gut instinct. It may be trying to tell you something your brain doesn`t know, they`re always be another tenant for you so resist the urge to cash in on a potential deal. The longer you`ve been in the business, the more you should trust your instincts.

Otherwise, meeting in person can be a next step. it can help confirm your feelings too.

 

[markl]

Any of the posters to this thread I would hazard this as I know most of you do not need the services of someone who would LTO from you and then get the tenant on board. If a LTO is what your after you can do it yourself very easily and you can be 2/3`s of the sandwich instead of the just 1/3. I do like this guys approach though could be worth looking into to see how many he is getting. All he needs is 2 - 4 per year and he would be doing extremely well.

Can one of you guys forward me his email that he sends? I would like to have a look thanks