Sale-Leaseback
I have a possible Sale-Leaseback situation and ShortSale wrapped up into one.
Can anyone link any articles discussing Sale-Leaseback situations? The main reason for my post is to get this information, or any other info on these types of deals.
Also, any language specific to the Sale-Leaseback agreement would be appreciated.
In this situation, I am not inclined to offer the owner the ability to buy the property at the end of the term. He simply wants to live there until his kids graduate from an excellent high school.
Thank you all.
Thank you SS Pro:
I am aware of some problems as far as recharacterization of the lease as a loan and the terror that that may bring.
I appreciate the point to make sure to treat them as two separate transactions, it is little tips like this that are very valuable.
Question: Is it crazy to work a short sale and close that deal, becoming owner of the home, and then executing a standard lease agreement with the prior owner. There would be no option to buy at the end of the lease, and no "rent credit" of any kind. I believe this avoids much of the recharacterization problem, since this does not look like a loan (since there is no option to buy).
I was thinking of doing a one-year lease with option to renew once or twice. The owner just wants to live in the home for a few more years and be gone.
He says he understands that if he cannot pay the rent for some reason that I would have to evict him.
Does this type of structure avoid some of the perils you speak of, or am I missing much of the danger?
Thank you for any guidance you may have.