Tenants wanting you to buy house for them
Have the more experienced had this happen? I don't run ads (word of mouth only) so this is new to me, but I have been contacted twice now this week by people who have found a property for sale that the like, are unable to purchase, and call me. They want to know if I will buy it and L/O rent-to-own it to them.
Have any of you ever did this? and was it successful?
Roger
It can work only if the sellers allow it to happen. You would be better off to tell them that you may have another property to help them with and then qualify, qualify, qualify. Unless of course, you are willing to buy the house conventionally and they allow you to raise the price. Most people haven't a clue about what we discuss and do on a daily basis.
Good Luck,
Shawn(OH)
I have done this quite successfully for a few rentals that I own. I had prequalified some potential tenants based on other properties that I was renting out but they ended up not renting. I told them that if there were houses in the area that they would be interested in renting -- I would be happy to engage the sellers to see if I could get a worthy purchase price. Both times, the renters signed long term lease agreements and I was able to get full payout leases based on 100% financing (80 first with 20 non amortizing second). They weren't homeruns from the standpoint of flip value, but they are both good long term rentals and having a tenant in the house the day after closing is nice for the initial cash flow.
Thanks for the replies.
I'll qualify them just like any other sell that I do, more so probably. I'm not sure what you mean by the seller allowing it to happen, Shawn. I do buy conventionally, if you mean a straight purchase (no sub-to, L/O, etc).
You touched on my problem with this, though. The potential tenant will know what I paid (asking price anyway) for the property. I already told them that I do this to make a profit, but how will they react to a price bump of $10-15K? Of course, that's assuming the seller is willing to discount it that much off an appraisal.
Roger