Downpayment for a rent to own/lease to own

[VicChung]

Hello Everyone,

I have been listening to the rent to own/lease to own audio from Mark. If I was to find a tenant who is willing to do a rent to own, and purchased a property at $300,000. The tenant is willing to put a deposit of $10,000. However, the bank needs 20% down, i.e., $60,000 on a rental property. How are those doing rent to own financing/raising the difference of $50,000? I understand you can use JV partners money. What are some of the other options that one can use to come up for the initial downpayment for a rent to own?

Thanks,

Vic

 

[Cargren]

QUOTE (VicChung @ Apr 21 2009, 08:38 AM) Hello Everyone,

I have been listening to the rent to own/lease to own audio from Mark. If I was to find a tenant who is willing to do a rent to own, and purchased a property at $300,000. The tenant is willing to put a deposit of $10,000. However, the bank needs 20% down, i.e., $60,000 on a rental property. How are those doing rent to own financing/raising the difference of $50,000? I understand you can use JV partners money. What are some of the other options that one can use to come up for the initial downpayment for a rent to own?

Thanks,
Vic
Hello Vic,

Sources of down payment would be the same as any real estate purchase. I`m not sure why there would there be other options that aren`t available for a non-rent to own investment. We have used funds from lines of credit and JV partners...

 

[PeterKinchMortgageTeam]

QUOTE (VicChung @ Apr 21 2009, 08:38 AM) Hello Everyone,

I have been listening to the rent to own/lease to own audio from Mark. If I was to find a tenant who is willing to do a rent to own, and purchased a property at $300,000. The tenant is willing to put a deposit of $10,000. However, the bank needs 20% down, i.e., $60,000 on a rental property. How are those doing rent to own financing/raising the difference of $50,000? I understand you can use JV partners money. What are some of the other options that one can use to come up for the initial downpayment for a rent to own?

Thanks,

Vic

You can also look at doing an insured mortgage, which would require as little as 5% down or a vendor take back for the remaining 10%.

 

[markl]

Hi Vic,

I am guessing this is a more general question than particularly on a rent to own. Commonly we are using a CMHC insured mortgage for 90% - 95% LTV so we need less down payment on the property. As to where to get those funds there are hard money guys or private lenders. But I think the majority of us are using investors.