House Rent to Own Questions. (1 Viewer)

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jrdbrn

jrdbrn

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I have a small 2 Bed 1 Bath shotgun home that I've been trying to sell. Century 21 hasn't shown the house in over 6 months and that angers me, but I have a contract until March. Regardless, I've had personal inquiries about a rent to own situation.

I don't really want to entertain this idea, but I may have no choice. My tenants are not reliable with making payments and the agreement was that they kept up the place if I just charged the note. If I did a rent to own, who is responsible for repairs? That is my main question.

My second question is does this sound too high? $8,000 down payment and $1,200 a month. It is a very small house, but the interior is nice and cozy. Our note is $735 a month from Chase. The $1,200 would be applied in full to the loan and I would keep the $8,000 as a security blanket. Is this doable or not realistic? I've never done anything like this.
 
I would assume that the reponsibility for repairs would be spelled out in the agreement.

The big issue I would have would be how is it treated if they default? Do you have to evict them? Or foreclose on them?
 
Obviously there would have to be an agreement within so many days of being late they would be evicted and lose the deposit, right?
 
jrdbrn said:
I have a small 2 Bed 1 Bath shotgun home that I've been trying to sell. Century 21 hasn't shown the house in over 6 months and that angers me, but I have a contract until March. Regardless, I've had personal inquiries about a rent to own situation.

I don't really want to entertain this idea, but I may have no choice. My tenants are not reliable with making payments and the agreement was that they kept up the place if I just charged the note. If I did a rent to own, who is responsible for repairs? That is my main question.

My second question is does this sound too high? $8,000 down payment and $1,200 a month. It is a very small house, but the interior is nice and cozy. Our note is $735 a month from Chase. The $1,200 would be applied in full to the loan and I would keep the $8,000 as a security blanket. Is this doable or not realistic? I've never done anything like this.
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The down payment and monthly note would really depend on how much you plan on selling the house for, and how long you want the terms of the rent to own to be.
 
You need to do a Bond for Deed. One of those lovely things that only Louisiana has. If you get serious about doing it, i know a guy down here that pretty much wrote the book on bond for deeds.
 
jrdbrn said:
Obviously there would have to be an agreement within so many days of being late they would be evicted and lose the deposit, right?
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A landlord has the right to evict if the tennant is 1 day late on making their payment. It's in every typical lease agreement.
 
CajunSaint said:
You need to do a Bond for Deed. One of those lovely things that only Louisiana has. If you get serious about doing it, i know a guy down here that pretty much wrote the book on bond for deeds.
Click to expand...

I was gonna post this. Bond for deed.

Get familiar with em. Heck, take CajunSaint up on the referral and speak to that guy.
 
jrdbrn said:
I have a small 2 Bed 1 Bath shotgun home that I've been trying to sell. Century 21 hasn't shown the house in over 6 months and that angers me, but I have a contract until March. Regardless, I've had personal inquiries about a rent to own situation.

I don't really want to entertain this idea, but I may have no choice. My tenants are not reliable with making payments and the agreement was that they kept up the place if I just charged the note. If I did a rent to own, who is responsible for repairs? That is my main question.

My second question is does this sound too high? $8,000 down payment and $1,200 a month. It is a very small house, but the interior is nice and cozy. Our note is $735 a month from Chase. The $1,200 would be applied in full to the loan and I would keep the $8,000 as a security blanket. Is this doable or not realistic? I've never done anything like this.
Click to expand...

honest answer - get yourself real legal help on this. as you can already see - this has a ton of issues related to it and isnt small potatoes for your finances i assume.
 
CajunSaint said:
You need to do a Bond for Deed. One of those lovely things that only Louisiana has. If you get serious about doing it, i know a guy down here that pretty much wrote the book on bond for deeds.
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You may have a problem if your mortgage has a "due on sale" clause. Get an attorney.
 
Applying the entire monthly payment to their future principle is atypical. You'd want some sort of 'interest', since you would be essentially acting as a bank while they get their **** together and can purchase the house outright. You would agree on a sale price upfront, agree on the deposit you'd demand (which goes to principle of terms are met), then agree on the time and payments, and the percentage of which will apply to principle. I've seen this split vary tremendously in the 10 years I've been a Realtor.

Most importantly, make sure the deposit is substantial. This is your ace in the hole. Best case scenario (for you) is that they can't get traditional financing at the end of the term or come up with the cash (typically a year or so), and you get to keep the deposit and house. Worse case you have to sell at a price you've previously agreed on, and gained a little interest income as you went.

Most importantly, like others pointed out, don't do anything without speaking to a knowledgeable real estate attorney first.
 
Your existing mortgage may not even allow you to do this so get with an attorney. And, if your house isn't being shown it's probably because the asking price is too high.

I listed my house 2 weeks ago and it's been shown 3 times and will be shown to three folks tomorrow.

mutteringbecauseihavetowakeupearlyonsaturday....
 
Are the tennants undermining your attempts to sell it? Sounds like they have a sweet deal so why would they want it sold? Are they the ones asking about rent to own?

I had this problem and once i evicted the tennants and cleaned up the place, it sold.
 
dtc said:
Your existing mortgage may not even allow you to do this so get with an attorney. And, if your house isn't being shown it's probably because the asking price is too high.

I listed my house 2 weeks ago and it's been shown 3 times and will be shown to three folks tomorrow.

mutteringbecauseihavetowakeupearlyonsaturday....
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That's what the Realtor told me... It's sad that I had to contact her to see what was the problem after 6 months of no word. My contract is up in March, so I will sell it for less myself since I won't have to pay the commission.
 

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