I have always believed that buying a house out of pre foreclosure and letting the owners rent back on a lease option is a bad idea. Well I may break my own rule here soon.
The hardest thing for me is when I hear someone say that they have been in the house 18 years and was trying to help their kid out of trouble and now they are going to auction on Nov 3rd.
I know my response should be… I am not going to keep the house so you probably won’t be able to stay.
But my sence of giving someone a break and taking a chance is making it hard to be a good investor.
Call number two today was the same thing only a little different.
But the last few times when I say no you can’t buy the house back. They say…well i am going to make a few more calls and find someone who will sell it back to me.
Any Ideas?
i heard of an investor who lets the “owners” lease back for 12 months with no payments as part of the deal. after that they either have to buy it back or move out.
I don’t know what his lawsuit rate was.
I have talked to one investor that does it all the time. And he has never been in a suit over it either. But everything we read on hear says that it is a really bad idea.
I just wondered if anyone has had a problem.
Thanks for the response’s
DO NOT rent or leaseback to the former owner…this is not a good idea…and if they coudn’t get the resources to stop foreclosure ( through friends or relatives ) then when they are behind in rent …they wont be able to either…i bought a foreclosure not to long ago…the former owner contacted me…and told me her friend was willing to buy the property back off me for some profit… i agreed to meet with her, after all she was still occupying the home and i wanted to meet her in case i had to " evict her" upon closing…anyway…she offered me $10,00 to assign the contract over to her, after going thru all her sobbing, and hardships, sick kids , and no where to live stuff…she brought a bible with her,… i told her i’d think it over…but no way i was going to assign the contract to her friend…i came home and did some research, i found out she own’s a 3 family home across the city, in good standing, with no leins, that has about $100,000 equity in it…funny how this just slipped her mind, and it was never mentioned to me…she just doesnt’ want to move back to her 3 family…anyway, i picked up the property for 319,000 …the identical home next door just sold for $400,000 a few months ago,and im going to f.s.b.o this one at the same price …think about that and your own family…and you’ll do well, happy investing