Lease Option For A Property In Pre-foreclosure
Very new to this but wondering if this is possible. Can you put a lease option in place with a property that is facing foreclosure. Pay out the deliquent payments and maintain payments as part of the lease with an option to purchase. This would give time to get a buyer in place. If so what is the difference between doing this and Contract for Deed. If this is possible what precautions are neccessary
Thanks
Yes, that is feasible. Check to see what amount the lien(s) are for, and negotiate a good price so that you can have positive cash flow.
The main difference, as I se it, between L/O and contract for deed is who is considered the owner. With a L/O you are not the owner until you exercise you option and close.
With a contract for deed, you are condiered the owner, though the deed is ususally held in trust until the obligation is met. This method, however, allows you to take tax deductions such as property tax, etc. This is not afforded to the L/O methed.
Hope that helps!
Good Luck!
With a L/O is there a risk of the property owner getting a second mort. on the property once the first mort is in good standing? If so how can this be prevented? Can this hapeen with a contract for deed? And does anyone know if Contract for deed is possible in Canada? Any help is appreciated
Thanks
This is an excellent question!
As soon as the looming foreclosure is off the sellers back, they may look for any way to get out of the deal. See an attorney to draft docs and record it!