Great Rental Property Hasn't Even Hit MLS Yet.
A property just four doors down from me just opened up and I am very interested in buying it for buy & hold purposes. All the numbers seem to add up as far as it being a good investment. I'm just not sure exactly HOW TO BUY it. I thought of doing a cash out refinance of my current home and using the money as a down payment but my current home does not hold enough equity. All of my liquid cash is currently tied up in doing renovations to my current home. So I currently don't know what my next move should be, but I really want this house.
Hi Jonathan,
You really want that house oh? But no money right this second? It sounds like money is not the issue, But timing is. You need more time to buy this house right? There is a way to get the deal, But it is not ease to do. It takes some time negotiating with the seller.
It is a lease with a separate purchase contract. You lease the house form them until the closing date of your purchase contract. The closing date is set far enough forward to fix your timing issue. You can sublet the house out while you hold the lease.
There is a lot of info here on BP that can give you the ends and outs on how to pitch one to the seller. Get a local real estate attorney to draft up an agreement if your land it as the devil is in the details with this.
Some items of note.
You still need cash, A large earnest deposit in escrow to be specific, money talks, cash is king, ect...
They own the house until you close, So any renovations done before closing are lost if you back out. That risk can mitigated by having the rehab first come out of your earnest escrow.
Be very carefully not to form a mortgage in the eyes of the court. A lease purchase can cross the line in to a mortgage very quickly. Use an attorney!
Of course, get the right to sublet in your lease with the seller.
Cloud the title by recording your purchase contract! This prevents the seller form backing out and selling out form under you.