Is This A L/O Or Not?
Met a gentleman yesterday that said he is going to be selling his house in about a year to year and half because he is building another home for himself. I thought to myself that maybe i could make an offer like this to him: Buy the house now in a way that I would be giving him $500 a month until his house is built, letting him stay there until then and use that money that I give him as a down payment for when he does leave and at that time find a lender that will loan me the money for the difference. At that time, I figure I should have about $6000-$9000 as a down payment. Reason for doing this is because of my credit standings. Think something like this would work, and if so, how would I go about it? Thanks for any replies 
sounds more like a purchase w/ carry over or lease back hybrid. Or an str8 option. is there debt? Would he carry the note?
you buy, and lease to him for 1 yr. He pays you "rent" which might be built into the price.
What happens at end of lease if the house isn't done?
Thank you for responding, that is just what I am looking for is to get some information from those that are more experienced. By having people respoond, I will be able to make sure that I do my homework to see that I do it the right way.
If you have $500. a month to invest why not do so and then offer a L/O to the owner when his house is ready. Use the $500. a month you invested to pay 3-5% as your option and then get the terms as long as possible. 36 months would be nice. This then gives you the 36 months to obtain financing and cash out. Offer the contract up now with no out of pocket expense until you move in.
Great!!!! That is a great Idea, though I want to make sure I understand this correctly, that the 36 months would start now at the time of offer. is that correct?
Tex,
Is this the house of your dreams or are you just trying to get into a nice home on a lease option?
Based on what you've stated in your post, this would not be a motivated seller in my opinion. Good Luck.
Dave
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Tex,
A few things.
1. Save the money and work on fixing the credit. When it is fixed you have a down payment.
2. Use the money for finding other deals. Subject-2 deals or similar. The cash being spent on marketing and the search. If you come up with deals that need more credit or cash then you have bring in a partner of sell out your position in the deal for a sum of money.
3. Pay the present owner of the house $100 for him to call you before he agrees to sell to anyone else and before he lists with an agent. Then record the option and wait for the call. About the same amount you would want to pay a bird dog for a warm lead that leads to a deal.
4. See if his construction loan or process would go smoother if he had already sold the property? If so see if he will do a lease back deal where you put up next to nothing now and let him lease back at the cost of ownership (more of less the PITI payments). Sometimes the person building needs to have shown they have already sold but do not want to move until everything is done.
Based on what you have said I do not expect the deal for the present place is as good as you can do with your money for the next 18 months.
John
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