Originally posted by @Matt Tobler :
I’m wondering if I were to find a house that is Rent-to-own under a lease purchase if I would be able to rehab the house and sell it. I would enter the deal with my down payment, negotiate asking price and potentially off to pay my year lease in full. While I’m in the lease I’d rehab it and quick sell it. After the sale I’d pay the owner what we agreed upon and take the profit. Basically I’m trying to figure out if that is possible or are there some rules that state that until the house is completely paid off I cannot sell it.
Thanks for your help! Matt
You would need the permission of the owner to rehab the house and it could be written into the agreement, but their concern might be "how do we know you will do things to code" and "what if you get half way done and can't afford to do the rest" and "what if you do a crappy job and it won't sell", etc. I'd say you'd want at least a two year Lease Option. You would rehab, then sell and do a double closing where the seller gets paid off with the money form your buyer. You can't sell what you don't own. So, you have to do the double closing on a Lease Option. Any good escrow company can do that for you.
Awesome! Thanks for the response! ☺️
Hi Matt, how do you plan to answer the potential questions the house owners will ask you about rehabbing the house?
Well I found the listing on Craigslist, in the listing it says handyman special. So basically from what I get from it is that he wants the house to be updated. It’s my first one so I’m just going to dive in and do my best to answer any questions he has. What’s the worst that can happen, he says no? From there I will contact my lawyer and have him look over everything before any money is moved and anything is signed. From the add it appears that he may be in financial trouble with the house so maybe the best bet is to just try to take over his payments and figure out a purchase price, then rehab it. This will be my second deal, first was a traditional hud house flip where we made 49k all said and done. My brother and I are both still learning and figured that the best way to learn about something is to just go out and try it.
Thanks Matt. That’s an amazing attitude you have about going out there and just doing. Thanks for sharing your approach.
$49k is a lot of gain. Did you work with any realtor or appraiser to figure out what you stand to gain after the Reno? I am trying to get started and just take action doing something. Without a partner and with all the doubts coming from my mind and surroundings, I guess I just need to hear specific steps around success stories like yours so I have concrete ideas on how one might be able to replicate your success (sorry for the long blurb lol)
Good luck in your deal. Please give us updates as you progress :)
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