Do You Prefer To BUY On L/O Or CFD?
Just looking for some feedback on how some of you prefer to buy, if given the choice. My attorney tells me to buy on land contract (so I get the deed and all writeoffs) and sell on lease option (so I can evict instead of going through foreclosure process).
It makes sense but I know many properties are bought on L/O and I like the idea of reducing my risk , the capability to change my mind, and let the owner pay the taxes and insurance. But I don't like the idea of the owner's capability of continuing to borrow money against the property and possibly owe more on it than I agree to pay them. I suppose it can all be addressed in the contract.
What pros and cons take priority when choosing which way to buy?
All other things being equal, I always prefer to choose the method that gives me the most control of the deed. I agree with your attorney when these two methods you listed are the only acquisition choices available.
Personally I prefer to acquire properties via "Subject 2" the existing financing.
Good luck,
Jeff
For me the big advantage of buying on LC is that when you get ready to move to conventional financing it is considered a refinance and therefore is underwriten as a refinance (appraised value rather than purchase price)-- A L/O is considered a purchase and therefore will use a LTV based on the purchase price or appraised value whichever is less.
The problem is that it's easier finding the L/O deals than the sub2 and L/C. Most won't sell under sub2 unless they are behind.
Depends on the bank and what your Contract states. You could make a good case for anything above market rent (best to pay in a separate check and call it additional Option Consideration), but 100 percent? I would say doubtful.