basically i found a house to buy and renters to rent it untill they can get a mortgage to buy the house. essentially using my credit till there’s is good enough.
Is there a basic form for us to sign saying that the rent will go towards a downpayment and if they dont buy the house by a certain date the downpayment is voided type deal.
sorry i dont know the terminology for all this im really new.
Sounds like your describing a Lease Option Agrrement. essentually the Lease Form, the Option Form and possibly a Memorandum of Option. If you count all the rent towards the purchase price you are being very generous. Its call the rent credit. Just search and read here before you jumpinto this and maybe take a course. Consider the course as cheap insurance you get it right. Herbster
Herbster’s correct. What you’re describing is an Option Contract.
Add the Option contract to your lease agreement, however not together, separate forms…
Also, about 95% of our deals, we do not give rent credits. We only give rent credits whenever
the buyer asks for it. So if your buyer has asked for rent credits, I probably wouldn’t go over 5%
of the monthly rent for credits…
HTH
Jeff Corpuz
Let me back up a little. The rent will not go towards the downpayment. The downpayment in these deals is really called the Option Consideration and that will go towards the downpayment. Jeff says 5% rent credit and I say a little more. At one time the rent credit would go towards the down, but that may not be true any longer. The rent credit actually works like paying down the principle on a conventional mortgage. See why you might need to read alot and take a course.
Herbster
So you want to buy a house and then set up a Rent To Own with a tenant/buyer. Excellent strategy if you do it correctly.
Just be sure you do the deal correctly and have some good agreements to back you up. You can check out a number of courses on lease options to guide you. Claude Diamond, Michael Carbonare, and Bill Bronchick come to mind.
when signing up for these courses do i get the paperwork involved?
I have Carbonare’s and that course includes all the agreements. But I’m not sure if Diamond’s or Bronchick’s do.
You can definitely go higher on the rent credits than just
5%, however they don’t own the home yet, so I’m not
giving them a whole lot of credit. 5% is reasonable for
a lease/option.
On a $1,000 per month payment, that’s $50 in credits!
That’s pretty good if you ask me.
I also turn the tables and let the buyers know that “as soon
as you refinance, you should be getting more equity build
up, so get focused on what you need to do to refinance.”
If they’re late once, no rent credit for that month.
Again, I never mention rent credits. I’m willing to give it, up to
5%, but we’re never the first to mention it.
HTH
Jeff Corpuz
is this guy legit all his seminar dates are from 2004 or 2005. i want an up to date mentor that hasnt washed out. i figure the best survive this recession
In my opinion you can’t beat Carbonares course for the money. He is quite legit. His forum is awesome, packed with everything you need and he answers his forum dayly. All the forms also but check them to see if they are compliant with your state. You should do that with anyones course. Herbster
Mike doesn’t do the seminar circuit any longer. I talked to him about that once and he said it was too much like being a snake oil salesman and he just opted out. He’s still active on his site and as an investor. To me that’s a lot more important than going on tour and selling.