Should I rent to my sub2 Seller?

Don’t worry, it’s not a leaseback, at least not exactly! Decent Sub2 deal 4/2 SFH on 1 acre, seller’s current but wants out after he broke his back 5 years ago. He’s easygoing, and willing to walk for loan balance of $110k. FMV is $140k; was listed for $149k for 2 years, didn’t sell, expired. I found him when he called my ‘for rent’ ad for 1BR ground floor duplex apt.

This could work smoothly, slide him out of house and into apt. He has a 10 year old pitbull, which concerns me as a landlord in the city. He had Ch. 7 bankruptcy four years ago, credit is 660 now, no obvious issues. Later, if I had to evict, could things get ugly if he alleges that I profited from his situation? My experience in housing court is all they care about is whether rent was paid or not, but could I be opening a can of worms here? These days you just never know.


HEY the big thing is CYA!!!

Make very sure all your paperwork is in the right place and filed right

As well if he rents another place from you he is now a renter and the other deal was business>>>> do not let the two become one !!!

If you think this may happen do not rent to him

The world of oh he-- can pop in at any time

You must CYA and follow your gut

He must be able to pay your rent >>>as he was not behind on the house

best of luck

I wouldn’t worry about housing courts. It’s the AG’s office or consumer protection agency who can give you problems if he complains.

personally I would not rent to him, while doing a sub2 on his house.

What happens if you have to evict him? or how about when you sell his home for a $20k+ profit, while he is renting your tiny 1br apartment?

i think its asking for trouble

Update, he found another place to rent, I closed on his house yday sub2 with plenty of CYA docs, recorded the deed, I gotta make 2 payments now–July, August–to get mortgage current ($950 PITI), but it will be rented/leased within a week or two for $1300. Back end will be $40-50k, I’m happy.