Delayed Financing with Lease Option to Buy

3 Replies

We are about to enter our first BRRRR deal. It is expected to be around $95k all in, with an ARV of $140k. We are buying with cash and want to do Delayed Financing when the rehab is complete and tenanted. The issue at question is we are considering leasing it with a 3 year option to buy to the tenant, and want to know if that would impact our eligibility for the Fannie Mae Delayed Financing program? I welcome any knowledgeable input on this, but particularly from lenders who might be familiar with the program.

@Larry Fried - I am more familiar with commercial financing options. Under a commercial program the lease option would not impact the deal. Many BRRR investors like to use our bridge loan ARV product then refi with our permanent product. These methods require the asset to be in a business name. However, if you are using traditional financing you may want to reach out to @Jerry Padilla he is pretty knowledgeable on the resi side.

if you are not going to live there once you buy it, I don't see FHA a good choice.

You could get a private JV partner for 20 percent down, own it, fix it then lease option the property.

You could also do a JV w the seller: buy it on seller financing w a single payment note and mortgage, fix it, resell it, pay off note

@Larry Fried

Web + D4D Mobile App for you & the team!
Trusted Provider of Real Estate Data, Marketing, Skip Tracing & A
#1 Real Estate Software for Investors, Agents & Brokers to find leads and close deals nationwide.
7 Day Free Trial!

Thanks @Brian Gibbons , but nobody is talking about doing an FHA here. @Nathan Click we are planning to keep in a personal name so that it will be eligible for conventional financing.  I think I just got a pretty definitive answer on my question off line.  It seems that lease to own will not interfere with getting a Delayed Financing loan whatsoever according to this experienced source.