Have a buyer to buy my property in rural Florida the deal fell through because the financing went bad with buyer for their (my buyers) home and now I'm considering lease to buy because it is the first and best option I've had in years. Seems safer the seller financing...Anything need to be aware of?
Your deal description is confusing, but little mater. Creative financing is a knowledge and a paper work scenario. BP has a zero down, creative book(s) to read. Amazon has tons of creative financing book. Youtube has alot too, just search rent to own. Good teachers are; Joe McCall, Joe Crump and others.
I sell/rent via rent to own;
1. Get higher quality tenants for a hard to rent location or asset type. Like mobile homes. All my double wides on land are rent to own. Your rural deal is typical scenario. Everyone wants to own if they can, especially small towns or rural.
2. Sell with out an agent fees. I really do want to sell all my deals, just finding a qualified buyer is hard. And this gets into the hard part of rent to own. So many buyers fail to actually qualify for a mortgage at the end of the optoin period... The solution is you let them stay as renters indefinately. You need to be able to hold. If you have to sell and sell fast, rent to own is not right tactic. Just start dropping the price till you find a qualified buyer.
3. Lots of details that are tricky to handle; how do you handle the option fee so that a bank will accept as part of the down payment, key to a tenant buyer being successful at getting a bank loan. Etc.
There's no disadvantages of LO/RTO lease optoin, rent to own, if you are ok holding as if it was a rental.
Difficulties are in screening the tenant buyer. The best indicator is if they've saved up a large bank balance, >$5k. Anyone who wants to eventually buy and has $1k or less is a poor candidate BUT many investors take these weak tenants as renters who will never be able to buy but who may treat the house better (owners mentality) but you need to screen screen and screen. I recommend doing a surprise home visit where they are currently staying. Most applicants; They will never qualify for the bank loan and this is where 95% of investors go wrong. Accepting tooooo weak a tenant buyer.
Much to learn re creative deal scenairos.