Hello!! I have a house that I am about to get under contract (purchase and sales agreement). But it currently is under contract to a tenant that is doing a rent to own. From 25,000 he owes 18,000. All Parties (current RTO tenant + Owner) have agreed to sell me the property (which I will not use my own funds, I will wholesale). The Owner of the property is on board and I have spoken to both parties via phone. They all just want to make sure they get whats theirs, so approximately $18,000 would be the owner of the property and $7,000 would be the current tenant that has the Rent to own contract. My question is, how will this work out at the title company and do both parties need to sign the letter of agreement contract? Any help is appreciated as I am new to wholesaling but very eager to learn. Thanks!!
If I was doing it (this is NOT legal advice) I would write it in on the PA that proceeds from the sale would be
split between the owner 72% and lesee 27% and that owner gives title company permission to disburse
the lesee's proceeds directly at closing. That way if any fees , taxes or liens are deducted from proceeds
the numbers will adjust accordingly and automatically. Your fee will come from the assignment contract.
Hope this helps you find your answer.
Thanks for the reply. Am I correct in saying the “PA” you mentioned is the purchase agreement? So I would basically be adding a line to the current contract, with the specific details? And if I’m right, who would be signing the agreement (owner & lessee, or just owner) ? Also since I’m new... the title company will automatically remove any taxes due and give the seller the remaining right? (which they have told me $500 is due in tax)
Thanks a lot!
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