I am looking at doing a rehab here is Texas. I have little money to invest and my credit would prevent me from getting a conventional loan without a large down payment. Is it possible to lease a home in Texas with an option to buy? My thought is to lease a distressed property with an option to purchase. I would have an option to purchase home at a certain price within six months or a year of signing contract. I would rehab property and try and sell for a profit during option period.
The house I am looking at is in pretty bad shape and would not qualify for a FHA loan in its current condition. If the repairs are done and the house does not sale, I would be able to get FHA financing with a small down payment and live there. That would be my exit strategy.
Would the Texas laws allow me to do this type of deal? Thanks
Upon further review, I would be concerned with the home owner not makiing his payments or having additional loans against the property that I might not be aware of. I read something about an FHA loan that would allow money to be held in escrow for repairs. Maybe I will look into that. Thanks.
I would not do any sort of repairs or upgrading to a property I didn’t own.
Haul away the garbage and tidy the gardens would be all I would do until the title was in my name.
Even with contracts, people don’t always do what they promised.
Me, I don’t have any desire to get into a lawsuit over a house. If a seller backs out of a lease option, I would rather let it go than to get into a legal battle. But if I have put $20,000 into renovations, then we have to go to court if he tries to change his end of the bargain.
Don’t deliberately put yourself into a position where someone else’s bad behavior can back you into a lawsuit.
What I would look for an owner who will sell to you with owner financing. Especially if you find one that has been a rental for a long time but is now terribly trashed and the landlord is now a serious don’t wanter. You might be able to convince them on a deal where your down is roughly the equivalent of what first rent and deposits would be.
Do your rehab and after you are done (and worked on repairing your credit) you finance out and pay off the owner, or simply sell the property and close out the owner.
Salverston,
So I would need to ask for owner financing at a given price? What exactly would I need to do with the signed contract? I would want title to the property with the seller shown as carrying the note, correct? Thanks
I would buy it Sub2 if I were you. You get the deed. You own the property. That would probably be your best bet in this scenario. I would pm fadi if I were you. I know he does a lot of sub2 deals in Texas. I’m sure he’d have some good advice. Good Luck