Rent to Own agreement proposal advise????
I currently have bad credit but make 100k a year and rent a house for 1450 a/mo. I was originally thinking of flipping this house and had a couple investors semi lined up however in reviewing the house and going over all of this I was thinking that it would be a great first house for me for the next 2 years then buy a bigger one and sell this one so I put together this proposal to present to my uncle unless someone else has a better idea but I would love every ones thoughts on whether they think this would be a good deal for both the investor and myself???? Please help!!
Rent to Own Contract
Whereas, ___________________ (hereafter Renter) desires to possess and have the use of certain property owned by ____________________ (hereafter Owner) and described in Attachment A, and
Whereas, the parties have agreed that Renter shall take possession of the property on MM/DD/YYY and have the use of the property until this agreement is terminated, and
Whereas, Renter and Owner intend that ownership of the property shall transfer to Renter upon the full completion of this agreement,
Now, therefore, the parties agree as follows:
Renter shall pay Owner the sum of $800.00 on MM/DD/YYYY and the same sum on the 1st day of each month for rental of the property.
If payment is late by more than three days, a late fee of $50.00 shall be due immediately from Renter.
The parties agree that the purchase price of the property is $25,000.00
The parties agree that $500.00 of each month's rent payment shall be applied towards purchase of the property.
The parties agree that ownership of the property shall transfer to Renter upon Renter's completion of 50 payments as described above. If balance is paid off sooner then 50 payments renter agrees to pay a pre-payment penalty of $2,500.00 to be added to the remaining balance of said purchase price.
The parties agree that if Renter fails to complete the contemplated purchase of the property for any reason, no refunds or credits shall be due to Renter.
Renter shall maintain the property, at Renter's expense, in clean, good working order.
Renter shall pay all property tax’s as well as all other expenses associated as if the property was in there name.
Renter shall indemnify and hold harmless Owner against any and all claims, damages, or actions arising from Renter's possession or use of the property.
If Renter fails to make a payment within 15 days of its due date, Renter agrees to surrender the property to Owner upon the Owner's demand.
If Renter fails to make a payment within 15 days of its due date, Renter agrees that Owner shall have the right to enter Renter's property for the purpose of taking possession of the rented property.
If after completion of this agreement renter sells said property 33% of total sale price will be paid to owner ( ).
Renter agrees to make and pay for all necessary repairs needed to include but not limited to, roof repair, plumbing repair, painting, heating system and kitchen remodel within a 12 month period or renter agrees to forfeit property back to owner with no refunds of and money paid thus far.
In witness to their agreement to the terms of this contract, the parties affix their signatures below:
_________________________________ _________________________________
Owner, signature & date
Address___________________________
City, state, ZIP _____________________
_________________________________ _________________________________
Renter, signature & date
Address_____________________________
City, state, ZIP________________________ Notary Signature :
_____________________________