Need Advice.Seller carry a note.

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This is the scenario. I have a listing on zillow rent to own. Purchase price being 94,000.00, They are saying they can put $50.000 down. As they have no job to qualify at bank for loan she wants me to carry the $44,000.00 note. Need suggestions on the best way to do this deal.

@Karen Moysi for clarity:

Lease-to-own is where you have a lease with the tenant, and every month they pay a small amount of NROC which slowly reduces the 'sale price' of the property until they've paid enough and they hit zero, or they get a bank loan for the remaining balance of the option and pay you off completely.

DISCLAIMER: there is a much more technical way to say this, but i'm trying to lay out the basics.

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Thanks Jeremy. With the past 2 tenants afraid of hearing their big stories. If I do the Lease/Option for 12 months I want a note from the lender saying that they qualify. As I have qualified 2 out of the 5 year exemption for living in the property need to have it sold ASAP so as not to pay capital gains.

@Karen Moysi this is now a fun ethics question ...


it's DEFINITELY more profitable for you to do a lease option with $50k NROC up front.  Then, if the tenant doesn't pay their rent and you evict them, you get to keep $50k.

It's probably less shady of you to sell to them with some sort of note-driven owner financing ... but then you have to hassle with foreclosure if they don't make their monthly, even though you know they have $50k in a pile somewhere.

Just to clarify, most of the people that I've talked to that operate using lease options would prefer a buyer give them $50k NROC on a $94k purchase and that the buyer have a letter from the bank saying that they most certainly do no qualify for a bank loan, because then in a few months, they can do it again with another buyer, and make even more money.

So the question becomes: How do you want to make your money?

The answer to which will dictate how you decide to proceed.