I am pretty new into REI , and a friend of mine told me about a builder that is willing to build me a home , and get me financed with a interest only loan , and also give me a builders incentive of $10,000/property , plus when the house is built , he would get tenants in it for me for 12-18months , and send me a cheque monthly for the duration of when the tenants are living there. HE also said that after the duration , I have the option to sell the home , or refinance the home , and keep it .
What i would like to know is , is this a common procedure with builders , and is this deal common out there. Also , what kind of question should i be asking this builder to protect my self
Any suggestions, concers and comments are greatly appreciated
There are a few questions you should be asking here. [list][]If the builder is getting you an interest only loan, what downpayment will you be required to bring to the settlement table? []What will you do with the property after the tenants the builder secured for you vacate the property? []What are the terms of the lease, and who collects the rents, who holds the security deposits? []How much will you be paying for the house in relation to FMV?
For the builder, this is a great opportunity. The builder sells his product which frees up more of his construction financing. Building houses and selling to investors keeps his construction crews busy, so they are less likely to leave to work for someone else. Having a rental house available for a buyer to rent while their house is being built could be a great selling feature.
I see this could be a win-win for you and for the builder, but you don’t know enough about your end of the deal yet.
That sounds like an awesome oppertunity. My question to you is, what is this builders name and where is this subdivision being built. FYI after you own a home, no Company, builder, ect can tell you weather or not you can sell, rent or refi. That would go against the owners bundle of rights.