What do you all think about buying properties and renting it back to the homeowners?
Im a hard money lender and thought it could be a good idea to help homeowners and make money at the same time.
Likely to put you out of business.
You are making loans to a consumer and you need to follow all the consumer regs which most HML avoid as they do not lender to consumers.
Second, a rent back tend to set up the situation in a way that the past owner might later claim all sorts of things. Some judges have reversed the sales and the investor lost out. Check your state’s regulations. Many times the person who wants to rent back will be in default or otherwise under duress.
Proceed with caution - if you signed an “arm’s length transaction agreement” when you did the short sale you can NOT sell or lease the property back to the owners. Many of the short sale agreements have a clause that says that the transaction must be arms length. This would also include leasing the property back to the owners or their family members.
Plus, if they could not pay the mortgage for their own house, why would they be able to pay you rent on the same property?