Congrats Mark! Once they are in, if they can qualify at six months AND the house appraises, then everyone wins on an early cash-out... We do not do many tenant first deals, so we have profit built in if they cash us out immediately, at six months, at one year, etc... making money when we...

Joint accounts and direct debit work well to protect the one property, however we have not found any way to protect against an overall bankruptcy filing. Knowing your seller's overall financial picture is part of due diligence (however, a lot can happen in 3 years). We had an AFS deal where...

Hi Mark: 1) Is the 10k to seller a deal-breaker? The less $ in the better for you. 2) How confident are you in $675k being current market value? Is the house in an area of good sale volumes (ie. they list and turn on average in good time) or is it an odd duck? 3) Option price of 750 -...

One of the best pieces of advice that we received when first starting out in RTO that works for us is: There is no formula. Every situation stands on its own. That said, we use the following guidelines: 1) Our selling is based on market rent + option credit, and the market decides...

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We definitely tell sellers we intend to make a profit on the house: "My accountant tells me that I shouldn't be exchanging 4 quarters for a loonie, that we need to make some money in our business..."

Hi Mark Does the excess rental payments (credits) and the deposit get held in a lawyer's trust account? If not, how is the tenant buyer protected? We do not keep them in a separate account, we have not run across any legislation that compels us to - such as: residential rent security...

If the option contract was already submitted, I would not recommend to re-submit with a back-dated contract. We are aware of an RTO client that was approved on high-ratio with option non-refundable in the contract. Awaiting word back on details... Can the broker send the deal to a lender...

Hi Aaron - thanks for sharing - great idea! We have definitely seen the AFS-killer lawyers here in AB. We have started to compile a list of AFS friendly lawyers to act for the seller. Regards, Neill

Diana Costain is a Canadian REIN member who runs http://www.buythesungroup.ca/ She has lots of experience with investing in the Phoenix area and is a Ron Legrand Masters student. (For the record, Lynda and I do not have any US props) Best of luck with your purchases

Hi David - two quick answers: 1) Every RTO candidate has a different credit/employment etc status, so there is really no "formula" answer. Folks that have great credit/employment history and are just short on their down payment are easy. The challenge comes with bruised credit, self...

Hi Will - congrats on your prospective deal. Rent to own structured properly is truly a win-win. The most common method to ensure that the monthly option credits are prove-able is to collect two cheques from your RTO tenant. Eg. if the monthly payment total is $2500 and you are giving them...

You could also talk with your lawyer to see if they will do what is called an intervening transfer. It is similar to what happens when a new home builder gives possession of a new house to the owner - they typically do not take title from the developper and title transfers directly. It is...

Hi - looking at the figures you presented, I stopped at "the house is worth $355 to $360". If your purchase price is $358, it sounds like you are paying market value (and possibly over market value if the 355 is what the house would sell for on MLS (after realtor fees or before?), it appears...

Hi Steve - need more info here I think - my first question is - is seller Scott willing to leave his 90k (less taxes owed) equity sitting in the property? As far as mortgage paydown, you can def build that in that it is to your benefit as purchaser. Also, is the appraisal recent and did...

Hi George - can you comment on what it is in the agreements that would deem it as income? We have been accounting for ours as a liability - deposits, and it only would come into income if the tenant buyer does not exercise their option to purchase. We collect 2 cheques - one clearly labelled...

One other quick chime in here - it has been our experience (granted it is Airdrie vs Leduc) that the 15k down RTO buyer is definitely the rarity... More seem to have 5-10 - are you willing to take someone with <15k? would be another question to factor into your decision Hope this helps...

+1 to what Brett said - if it is only 4 mos behind, then chances are they have just started the process, and the owner still is on title - if that is the case, then redemption is still possible.

Great post Andrea!!! Agreed - Bandit signs, the uglier the better - generate a ton of calls.... We are also fortunate to be in a smaller market so our Kijiji ads generate decent response and they don't require bumping every day....

We have typically been going with 5yr variable closed mortgages on our RTO properties with re-fi. Feedback welcomed for this thought process: The interest penalty for payout is 3 mos interest on closed VRM. On a 300k principal balance, @ prime-0.7 = 2.3% payout today would be 6900/12 x...