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[1abastarsmda]

Man, that is awesome...

actually might have someone else lined up - starting as a renter for now

wish I could have just sold it, but the market here is DEAD, house has been on the market since mid-April and we had about 10 folks view it, there are 93 other 4/2.5's in the same area for sale, and we are dead in the middle for price

The builders here are offering 10% to the realtors and all closing costs so folks are flocking to those, they are killing us

One thing I think I forgot to mention is that you should not listen to what a realtor has to say about how to do a land contract or rent to own deal.  Please forgive me if any of you reading this are realtors, but from my experience, the realtors only know the end of the deal that they are seeing, and they are not seeing the actual mechanics of how a final loan on one of these has to go through.  They will have no idea of what the mortgage broker had to deal with to get a loan completed, and how many lenders they couldn't do the loan through because of the way the deal was set up.  With that, I still say that speaking with a mortgage broker that is familiar with what can and can't be done, and how in your particular state is going to be the person with the correct answers.  The last thing that you want is for this to drag out 4 or 5 years, only to find out that it was never set up correctly in the first place.

[chicagobulldog]

I have been doing rent to own and contract for deeds for more than 25 years. Here are a few tips:

Run a credit report. It might be OK if they have had problems in the past for legitimate reasons like a medical issue or loss of job. However, if the credit report shows a history of non-payment, stay away. You will be the next victim.

Financially qualify the person from a debt to income (DTI) perspective just like a mortgage company. I use the ultimate end payment for my calculations. For example, if the rent is 1800 per month and the ultimate house payment will be 2100, I use the 2100 for qualification purposes. I use a DTI of 40%.

If they are not clean and neatly dress, pass. Look inside the car. It can be old, but if the car has trash strewn around, pass. Check references especially past landlords.

NOW HERE IS THE BIGGEST TIP. GET A SIGNIFICANT DOWNPAYMENT. A good rule of thumb is at least 5x the monthly rent.

[Sean M Cary]

I have been doing rent to own and contract for deeds for more than 25 years. Here are a few tips:

Run a credit report. It might be OK if they have had problems in the past for legitimate reasons like a medical issue or loss of job. However, if the credit report shows a history of non-payment, stay away. You will be the next victim.

Financially qualify the person from a debt to income (DTI) perspective just like a mortgage company. I use the ultimate end payment for my calculations. For example, if the rent is 1800 per month and the ultimate house payment will be 2100, I use the 2100 for qualification purposes. I use a DTI of 40%.

If they are not clean and neatly dress, pass. Look inside the car. It can be old, but if the car has trash strewn around, pass. Check references especially past landlords.

NOW HERE IS THE BIGGEST TIP. GET A SIGNIFICANT DOWNPAYMENT. A good rule of thumb is at least 5x the monthly rent.

thanks for this!

got it rented right now, to a Marine Gunnery Sergeant...met him twice seems squared away and promised to take care of my house.

told him we had been asked about the rent to own thing and were open to it

appreciate all the feedback!

Sean

[T MAC]

  Glad to hear it is working out for you.

[JCZ]

My experience is that they usually take better care of your place than a month to month renter.  You're going to require an initial deposit that's non-refundable (here in Calif. it's usually at least $5k, depending on the home and value) that would help to offset any damage that may occur. 

Other advantages are that the payments to you are more than the rent would be and they usually stay in the home longer than month to month renters do.  If they default on the agreement, you keep everything and take possession back. 

In the RTO agreement, they're responsable for everything however, I kept water, sewer and garbage in my name and they pay that to me each month.  The reason for that is that if they fall behind on that, you could end up with a lien on your home and not even know it.

You might want to search out a local real estate investor's club.  That's where you can get first hand knowledge for your state laws and actual first hand experience from people in your area.  Some investors like RTO and do nothing but while others shy away.  Good luck with it.

[DICKW]

Go with the Gunny, you should have no drama.

Military to Military....good move.


I would still check him out, call his old 1st Sergeant.

[Sean M Cary]

Go with the Gunny, you should have no drama.

Military to Military....good move.


I would still check him out, call his old 1st Sergeant.

turns out he's a friend of a good friend (and fellow Harley owner)

and he is going to MARSOC...which is a pretty high speed unit (Marine Corps Special Operations Command) so he is pretty tight, having two face to faces with him I am pretty comfortable with him and I also met his wife

We have a rental manager - 10% but they do credit checks etc for us and act as a go between