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How to structure this deal??
3 posts by 3 users
Brian V.HandymanAllendale, MI 
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I've got a call into a realtor for a house that he's selling for $91,000. He has renter's who were the previous owners. They stuck $40k into it. The house sold for $135,000 in 2006. The renter's want to stay in the house and get their credit back into shape for 12-24 months. They will then buy the house back for FMV. How do I go about getting this property with little or no money out of pocket. I was thinking lease option/purchase? Or is there something better. Thanks for the advice. bjvd31 |
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Jon H.Real Estate InvestorDenver, Colorado 
 Moderator |
Don't get involved. Having previous owners in a lease and buy back later situation is a recipe for disaster. If they don't pay and you try to evict, a judge may decide its not a lease at all, but a mortgage. The " rent" is actually the mortgage payment and the future purchase price is a balloon payment. If you factor those into the amount that was paid off for them when the house was sold from them to the buyer (your realtor?), the interest rate will work out to be very high, and you'll be accused of usury. At best, you'll end up having to foreclose instead of evict. Jon |
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Dan O.Real Estate InvestorCO 
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Wheatie makes some good points. Curious...the real estate agent is actually the seller? If so, does he currently have any type of buy back agreement with the previous owners? Personally, I don't have a problem doing an equity split deal but not unless there's substantial equity to be split. With the details you've shared...I'd pass. Dan
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Posted: 01/07/2008 at 08:02AM