Looking for someone, or advice, to help get into a Lease to Own contract in California.
I am the tenant and the landlord says he wants to sell the SFR when I move out. Contract terms will be resigned in April, 2018.
Therefore, I'm looking for someone or some direction on how to negotiate terms with the landlord so the landlord understands the benefits and instead of signing another 1 year lease, my money can work more for me.
Any info is greatly helpful!
History: I'm living in SFR for 3 years. This SFR used to be landlords primary residence. He bought and lives in his second SFR as of 8 years or so. Every year we talk to the landlord about Lease to Own but he dismisses me saying that I wouldn't want this house. The landlord needs to be educated, shown numbers, and negotiated with.
A lease to own isn't what you think it is.
Lease to own is simple a lease with an option to buy down the road like within 2-3 years. You're already leasing. If you want to buy the house make him an offer. If you don't have the down payment or the mortgage, try seller financing or try to figure out how to get a mortgage.
Most people that do lease to own never buy. If they don't have the credit or the down payment at the time of signing the lease, it's hard to repair their credit and save the down payment in 2-3 years.
Lease options for a house are nonrefundable and usually run around $2,000 to $5,000 depending on the market value of the house. The rents are usually at a premium and don't go towards the house price. Paying the option and the rent premiums makes it harder to save for a final down payment.
The option money is merely locking in the purchase price. If the tenant doesn't buy the house the option money and the excess rent payments are lost. Also, most turnkey operations tack on another 6%-8% every year during the lease term for maintenance, so the final purchase price ends up being higher than market value in some cases so the tenant doesn't buy.
As a tenant, lease to own is a waste of money. It's great for landlords.
Thank you @Christopher Phillips for your very thorough explanation.
What type of professional should I talk to about drawing up terms for Seller Financing? Real Estate Lawyer, Broker, Loan Agent, Banker?
I want to draw up a contract to use as a basis for term negotiations. Meaning I want to draw up a contract with what My Agent and I think are good terms. Then take that contract to the landlord to start negotiations. Without a Seller Financing contract in writing, my landlord will further dismiss any negotiation attempts.
Your agent will present the offer. After a deal is finalized, a lawyer will draw up the promissory note for the financing.
Maybe you need to better understand why he keeps trying to convince you that you wouldn't want the house.
For seller financing, you would want a real estate attorney to draft a promissory note which would detail the terms of the financing, and in California it should include a trust deed as security for the lender/seller.
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