Can I do a land contract and a lease purchase? Please Help

Hello Everyone:

I’ve got a property 4BR/2BA house under contract, nice neighborhood that investors are clamoring for.

I have no credit and no money. However, I’ve thought about wholesaling it, but, I would like to

keep it and rent it out, to build up my credit and portfolio. The owner is willing to allow me to rent it out for six months. I figured this would give me enough time for the land contract to be seasoned and refinance paying off the owner, and during the six month period renter’s payments would cover the mortgage payments until I can buy them out at the end of six months. As an incentive to the owner, I could also offer them a small percent of the profit once refinanced and take the rest of the money to buy my own cheap properties…

Am I on the right track?

What else should I consider?

Anyone with some step-by-step instruction to this would be very appreciated :biggrin:help

I think you may be going backwards… Remember in a BUYERS market buyers are in control

I f you dont have money or credit then doing lease purchase probably will not work out well for you as you have to make payments some day and will not be able to refinance for quite a while either. If the value is there (as in enough equity) I would consider placing a simple option on it for a low price for 90 days and then marketing the option to another investor or home buyer.

Besides being a 4 bed home, what does the rest of the deal look like? repairs, asking price, loan payoffs, value after all repairs have been completed, etc

What do you mean that “you have it under contract”? Having an accepted offer and having a land contract are completely different things. Have you actually signed a land contract with the seller? If you do, then you may be on the right track, with refinancing out at the end of the land contract. keep in mind that most traditional lenders won’t go over 70-75% LTV (based on appraisal) on the refi, so depending on what it appraises for, there may not be as much cash left over as you think…