Lender Problems With Nw Buyers
Just wanted to get some feedback on any potential problems that could arise from lease optioning a property and selling on a dual closing whether it be now or down the road if I was to sandwich lease it. I have done one of these on a rehab with great success, but want to make sure it was not just luck.
What concerns should an investor have when selling to a buyer in this manner? Will the buyers lender question what is going on during title search? Is it better to call the lender immediately before accepting an offer? Should I get a power of attorney if I am listing the property for sale with or without a realtor? (I was told this by the buyers agent during my last deal) What standard practices should an investor use to legally protect himself and ensure that the deal does not die at or just before the closing?
Thanks
TBarber
Can anyone respond knowledgeably about this post.
TBARBER
We always control the lender when we are selling to a new buyer. We say that we close all of our properties with Broker A and they have the best rates around because we are in the real estate business and shop around. Our broker knows that the title will not be seasoned and she uses a lender that doesnt care about it. The transactions move pretty easily if the buyer can qualify for about anything.
*Bump*
Money,
Just for clarity, if they B/T is paying insurance and taxes in their rent to you, you have to let them know? I have read hre that if they are paying insurance and taxes it could somehow create equitable interest for them. How is this dealt with then? I assumed you are paying insurance and taxes if it is escrowed, they are not directly responsible for sending in the payment or is that just a technicality? Sorry, but I am somewhat confused on this point.
When doing a sandwich lease make sure you have a tenant lined up so that you can get an option deposit from them that hopefully will be higher that the deposit you gave the original buyer. Make sure that the option for the tenant expires on or before the date of your option with the buyer. You would be buying the home at one price and be selling it to your buyer for a higher price. You would also be charging rent plus rent credit to your tenant so that they could build up a down payment. This would of course be more than the amount that you would be paying the original seller so that you would have a positive monthly cash flow. Hope this helps.
thanks radkison for clearing this up for me. so now i understand that i could get it under option to buy for 100k and in turn sell it to a t/b for 110k. all the monetary terms for the option should be somewhat higher than my terms and there is my profit. WOWSER! i am totally mesmerized by this concept. i will immediately do more research on this!!1
Hey Jeff,
Does the property have to be owner occupied? find out and if not, change it to a rental and than you can lease option it.
Good Luck! let me know what you find out!!
Money!!