How do I purchase when the seller has "rent to own" contract

Question

Local couple is wanting to sell a property an hour drive away. They have a "rent to own" contract on the property and have been making payments for several yrs. a STATE LINE is involved, so I can’t use my normal title company. The only attorney in Magnolia, MS has never heard of wholesaling and balking. I have 2 questions:

• 1.Does anyone have a contact near Magnolia, Mississippi that understands wholesaling that I can close through?
• 
• 2. Is it possible for me to have them assign me their “rent to own” contract?There is no language in the contract forbidding assignment.If we involve the original owner, the original owner will not be happy about me getting in the middle of this for profit. The original owner will profit most if the couple defaults and walks away so the original owner can sell the property AGAIN – I’m working to avoid that.How can I structure a deal that leaves the original owners clueless until I hand them their payoff money that my Motivated Sellers owe them?
• There is no language in the contract forbidding assignment.
• If we involve the original owner, the original owner will not be happy about me getting in the middle of this for profit. The original owner will profit most if the couple defaults and walks away so the original owner can sell the property AGAIN – I’m working to avoid that.
• How can I structure a deal that leaves the original owners clueless until I hand them their payoff money that my Motivated Sellers owe them?

• There is no language in the contract forbidding assignment.
• If we involve the original owner, the original owner will not be happy about me getting in the middle of this for profit. The original owner will profit most if the couple defaults and walks away so the original owner can sell the property AGAIN – I’m working to avoid that.
• How can I structure a deal that leaves the original owners clueless until I hand them their payoff money that my Motivated Sellers owe them?

Scott Wolf · Answer

@Jim Burkett, I may be wrong, but I don't believe that rent-to-own contracts mean the renters must buy. So, in my estimation, your 'motivated sellers' don't owe the owners anything, and are under no obligation to purchase the property. If they are, they got themselves into a bad deal.

I don't think the original owner's will care about you making additional profit, as they agreed to whatever price is in the contract, with what is probably an acceptable profit for them. As for assigning the rent-to-own contract, you need to read the contract and see if it's possible.

If you can get a double closing done, or be a HML for the current renters to bridge the closing, it should be fine.

Good luck! And based off a Google search, McComb, MS may have a title company that works, as it seems to be the closest town to Magnolia with a larger population.

Susan Maneck · Answer

If they have a rent-to-own contract they don't actually own the property. I'm not sure those are even legal under Frank-Dobbs, although they are common in Mississippi.

How do I purchase when the seller has "rent to own" contract

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