Lease to Own question.

4 Replies

I am considering going into a Lease to Own situation, but am structuring the plan to make it "just right". One issue I have is the potential seller takes my check before the 1st (sometimes dead on the 1st, but NEVER later). There are times that the seller/landlord does not deposit the check immediately and will post on my account as a debit about 7-9 days later. I don't get cancelled checks anymore, so how do I prove to the potential lender that I didn't pay the seller late? How do I avoid situations like those (without paying ridiculously early)? Does the seller have to have a notarized letter explaining the delay? Just want to know how I would handle this if I go this route.

Thanks.

If you're doing a 'Lease to Own' or a Lease w/ the Option to buy known as a Lease/Option, you're really just a tenant until you exercise or complete the exit process that should laid out in your lease/contract.

As far as making sure the landlord makes the payments on-time, there really isn't anything you can do, again, you're just a tenant. You could see about having some addendum's put in your lease agreement that cover this potential problem.

This is why I'm not a big fan of 'buying' via Lease/Option, Lease to Own or any other term used. I much prefer having title, therefore, being in control and having ownership like a Sub2 deal.

Are you purchasing this as a primary residence or an investment property?

Originally posted by motiv8td:
If you're doing a 'Lease to Own' or a Lease w/ the Option to buy known as a Lease/Option, you're really just a tenant until you exercise or complete the exit process that should laid out in your lease/contract.

As far as making sure the landlord makes the payments on-time, there really isn't anything you can do, again, you're just a tenant. You could see about having some addendum's put in your lease agreement that cover this potential problem.

This is why I'm not a big fan of 'buying' via Lease/Option, Lease to Own or any other term used. I much prefer having title, therefore, being in control and having ownership like a Sub2 deal.

Are you purchasing this as a primary residence or an investment property?


Thanks Nick for the response. I understand that I'd be just a tenant, but I see the Lease Own touted enough, so I figure maybe that's not a bad deal. I would be doing both. It's a 2 family and I'd potentially live in the first floor and and rent the second. I would like to do that for a few years and then move into a single family while still keeping the property. I would imagine that if I entertained a contract to L/O, I would have stipulations that covered my potential issue, as well as the other ones such as divorce, bankruptcy, etc (which even a Subject 2 from what I read from you are potential issues).

I have read through halfway of your book on Sub2 (good book and I'd recommend it). However, that DOS [even though you and others say "not to worry about"] does, at minimum, keep me up at night and I'm not sure if I want to do a sub2 for the short term that it would require. I'm trying to get properties for long term. I welcome any and all suggestions (remember, I still can't spell Real Estate Investment...let alone practice it...yet. LOL)

Use your banks bill pay service. It is most likely free and they normally withdraw the amount from your account and put it into another account to draw the check from. This way it will show you paid on time every time. It is also a good way to keep your personal account number to yourself if you wanted to do that.

Originally posted by Kevin Amolsch:
Use your banks bill pay service. It is most likely free and they normally withdraw the amount from your account and put it into another account to draw the check from. This way it will show you paid on time every time. It is also a good way to keep your personal account number to yourself if you wanted to do that.


That is actually NOT a bad idea and you are right. I do use my bill pay to pay EVERY bill I have except for rent (because the landlord lives a few blocks away and I'm trying to get rid of these checks....lol, I won't be ordering any more). Even if he deposits the check a month ago, it's drawn from the bank draft account and not my own account, because the funds are taken out on the day I wanted it to be. (What was happening prior to that was when a creditor like my car note company got the check, they would get it early and would charge it before the date and overdraft my account. BOA had no choice but to refund any overdrafts to my account because it was my creditor/banks fault for them cashing it early. I guess too many folks were getting hit like this, because now they use the corporate draft and withdraw day of the account).

Yeah, that is a good solution and gives me something new to consider. Thanks.