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Owner Financing

anyone ever done any owner financing or rent to own a house? I've got a rental home up for sale and someone interested in buying but they can't get a loan right now, I'm really considering this option since I'm over having a rental, too much time and money invested. Just curious on the outcome if anyone has done this and do you recommend doing this?

 
Anonymous

Asked by Anonymous at 1:17 PM on Dec. 15, 2009 in Money & Work

This question is closed.
Answers (5)
  • Speaking from experience, you can make a killing off of "rent to own" agreements. Take 5-10k cash down to hold the loan for a year or two till the buyers can get bank financing. If not, they're out on their ass and you've made yourself a nice little chunk of cash. All they are doing is purchasing the right to buy the property first therefore not allowing you to sell it anyone else for whatever period of time you both agree upon. You are not obligated to give them their deposit back. I'm not saying this is ethical or moral but it's been done several times over legally. When that kind of money is involved, the chances of them burning the place to ground is slim to none but if they do, you'll be getting the insurance check.

    FYI-don't even consider doing this if you live in a blue state! lol I'm not a lawyer I just file their paperwork.
    Anonymous

    Answer by Anonymous at 10:50 AM on Dec. 16, 2009

  • I would be very leery of lending money to a stranger who did not qualify for a bank loan.
    rkoloms

    Answer by rkoloms at 1:24 PM on Dec. 15, 2009

  • I used to have a few rentals and looked into lease optioning a couple of them. My advice is to NOT do it. There is nothing to keep them from ruining your home. It is hard to tie up legally (at least in WA state). I have known 2 people who have been burned.
    mamakirs

    Answer by mamakirs at 1:27 PM on Dec. 15, 2009

  • You could set up a land contract, which is where the buyer makes the payments directly to you. YOU have a lien on the house, just like the bank would, if the buyer defaults on payments. You should get a lawyer to draw up the paperwork. Later, when the buyer qualifies for a loan, they can pay you in full for the remaining balance and you sign off, OR you can sell it to a company that buys up land contracts.

    michiganmom116

    Answer by michiganmom116 at 1:33 PM on Dec. 15, 2009

  • I saw a poor woman on the news who did this and when our town flooded she was stuck with the houses after the "buyers" ran off with the FEMA money. If they cannot get a bank loan they cannot afford the house or have proven to be responsible enough to own. I would find another buyer.
    Anonymous

    Answer by Anonymous at 1:33 PM on Dec. 15, 2009

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