Use appliances as down-payment

[llee]

Hi,

I have a renovated unit for "rent" or "rent-to-own". A gentleman called me yesterday, and he said he`s interested to rent with his family. His credit was bruised due to previous business loss, etc. Now he has a good truck-driver job with $800-1200 per week. He can come up with first and last month now, but not anymore at this moment. He is also interested in rent-to-own.

I have no appliance in my newly renovated unit, and I was about to buy them myself. However, this gentleman said he has all the appliances in storage (he and his family just moved to the city), and he can use them.

I haven`t seen the condition of his appliances. However, would it be a good/bad idea to use his `appliances` for additional down payment or security (rent or rent-to-own)? For example, I buy his appliances for $1 consideration and he can use them. I will sell them the appliances for $1 if he exercises his option, etc?

Thanks.

 

[invst4profit]

Just my opinion but if that is all he has he isn`t bringing anything to the table and I would definitely pass.
If he doesn`t have enough skin in the game he isn`t in the game.

He is tenant material not RTO material.

 

[PropertySolution]

invst4profit, how do you determine the amount of deposit you ask for when doing a RTO?

I do agree with you whole heartedly in not accepting appliances as a deposit. But if he wanted to consider used appliances he could always check them out, make an offer to purchase and apply the funds as a partial deposit.

 

[markl]

Lucas,

I agree with Greg. Why put him into a RTO right now? Why not let him rent for 6 - 12 months at a little bit of a premium and if he is a good tenant you can go back and take his premium and double it up and voila you have a down payment and a great tenant.

Regards,

 

[invst4profit]

I don`t do RTOs but the deposit should be a percentage of the purchase price.

 

[Minoune79]

Have you figured out how much his appliances are worth? How old are they? It would probably be a good idea to make an estimate before making a decision with that. Did you check to see if his appliances are completely his (maybe he`s making payments on them still)? Personally, I wouldn`t rent to own to anyone who doesn`t have anything less than $2,000 to put down (in either cash or assets), generally.

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