Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
I was taken aback recently when the tenant (1 year) asked me to seriously consider selling my house to him using an owner carry contract.
I understand the pros and cons regarding such.
However, my question is simply this; would BP members consider this as a way to “leverage” the asset to get cash (tenant/buyer’s down payment) for another property investment?
Please feel free to tell me I’m crazy to even consider such an idea.
Favorite new saying; "Mistakes are our best mentors, but soliciting other BP member's advice beats making stupid mistakes."
I was taken aback recently when the tenant (1 year) asked me to seriously consider selling my house to him using an owner carry contract.
I understand the pros and cons regarding such.
However, my question is simply this; would BP members consider this as a way to “leverage” the asset to get cash (tenant/buyer’s down payment) for another property investment?
Please feel free to tell me I’m crazy to even consider such an idea.
Favorite new saying; "Mistakes are our best mentors, but soliciting other BP member's advice beats making stupid mistakes."
Thanks!
That is what I do all month long. I get $25k down nonrefundable, above market rents on a Lease Option, let them do all maintenance and repairs. I use the money they put down to buy the next house using Subject To. Rinse & repeat.
It can work but it is highly doubtful he will be able to afford the purchase. If you go forward make sure his finances are in good order and his credit rating is spotless. Remember he pays all costs/legal fees for drawing up th emortggae.
You need a significant non refundable DP to cover your costs if/when he defaults. Keep in mind he wants owner financing because he can not qualify for bank financing...very high risk.