I will be attending University of Northern Iowa in the fall of 2021 and am looking for a house to live in while I am at school. I, currently, work at a bank here in my hometown and I will not eligible for an FHA loan for another year or two. I would like to get a house in Cedar Falls on a "Rent-to-Buy Contract". Essentially, I would be in charge of all property management i.e. finding tenants, lawn care, minor repairs etc. In exchange, we would have a set sale price and I would buy the house in 2-3 years, or whenever I can get a loan. Ideally, an amortization schedule would be set up with the owner and my monthly payments would reduce the final sale price.
I have never done a contract like this before, and I would love to get some helpful tips or advice from anyone!
These are two separate contracts...not one. Don't make the mistake of combining them.
No credits given. This is not a land contract. The Option contract is a contract between the owner and the "potential" buyer giving the potential buyer the exclusive right to buy the property for a predetermined price during a predetermined time frame. That is an option contract, and the Option Consideration is the full price of the Op[tion Contract...it is NOT refundable, and is NOT part of the down payment on the "potential" purchase. When/if the Option is executed, there will be a traditional Purchase Agreement signed...just like any other purchase of RE. That is a third contract.
@Kaleb Bauer I think this is a VERY smart strategy if you can find the investor to "partner with". One flaw I see is that you are going to need to overcome the inherent guard that investors have when renting to students. Assuming you are responsible, you are going to have to find a way to prove that responsibility OR provide a substantial down payment at the beginning of the agreement that you will forfeit if you don't meet your responsibilities in the deal.
There are many ways to write up a deal like you. are explaining, it MAY not be a contract to purchase, it may just be a simple partnership between you and an investor. Maybe start finding people here on BP that are investing in the area and start reaching out and scheduling calls with them, it will help you network in the area and it will also help you better clarify what you are willing to provide to an investor and what an investor may be willing to provide to you.
Best of luck super exciting!!