BiggerPockets

I have people interested in renting to own a couple of my properties in MO. I have existing conventional mortgages on both of them. For Contract for Deeds in MO, if the buyer defaults, do you have to foreclose, or would I just be able to evict? Also, does anyone have any specific forms they use for both options? Any helpful tips related to either method?

The more details the better, as I am not very familiar with Contract for Deed, and have never done a Lease Option to sell a property.

Thanks.

Thanks Brian.

This one potential buyer is a church that is located right next door. I would really prefer to hold the mortgage for them instead of being their landlord, but right now I don't want to use my limited capital to pay off my current mortgage on the property, so I was thinking a CFD would work well.

Like I said I do not know a lot about CFDs. Can you be specific as to what Equitable Interest issues come up with CFDs?

Thanks.
Dawn

Thanks Curt. I will definitely look into that. I have heard Wendy's name before.

I do need to get back to the buyer tomorrow or the next day on this, as they are looking to move in by August 8th, so if anyone has any information they could provide in the meantime that would be great as well!

Thanks Brian. The church would like to make the house it's computer and job training resource/meeting center for its youth and other constituents. They are looking to hold the property indefinitely, and I can see them eventually working out deals with all the property owners with adjacent properties to their current church to keep expanding.

Holding the financing for them is very attractive to them, and then eventually they would solicit funds from their congregation to pay off the mortgage down the road. We started conversations talking about doing a lease with option to purchase. I mentioned to them over the course of our conversations that when it comes time to execute the option, I would be willing to hold the mortgage for them. They then asked if we could do that now (or within the next month) and I told them I would look into it.

The property is worth $77K. They are planning on coming in with a $5K down payment, which they said they would have by Sept. 1st. Assuming they can get up $1K - $2K, I would let them move in around August 8th on a short term 2 to 3 week temporary rental basis, as they would like to start transitioning into the house while they get the full $5K up. I would get paid a rental amount pro-rated for a few weeks, and a "security deposit" to cover myself in case they very unexpectedly change their mind in the few weeks in between.

Hi Dawn:

I find these 2 articles great for REALISTIC seller financing, for both Sellers and Buyers.

http://www.forbes.com/2009/07/29/mortgages-refinancing-interest-intelligent-investing-foreclosure_print.html
Heavy hitters in mortgage industry forcasting how hard it will be over the next 12 months to get a home loan.

http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Rent-to-own+your+home%3A+Pro+and+con+-+Jun.+4%2C+2009&expire=-1&urlID=404320156&fb=Y&url=http%3A%2F%2Fmoney.cnn.com%2F2009%2F06%2F02%2Freal_estate%2Frent_to_own%2Findex.htm&partnerID=2200
Pros and Cons of a Lease Option

IMHO, after helping hundreds of LO Tenants get financing for home loans, in the present and coming 24 months:
- 10% - 20% down will be normal, maybe more
- 28% income to service mortgage will be mandatory
- Low consumer debt will be mandatory

Offering long term lease options to get out of this crap home loan financing environment and building up large 10 - 20 percent down payments for the tenant buyer is generally is generally my best exit strategy, at least for now.

Brian Gibbons