Lo Question
for example... if I do a 2 yr l/o to a tenant- buyer for a house worth 130k today and have them buy for agreed on 140k 2 years from now.. with 4k option consideration going toward purchase price... im wondering will a mortgage comp.. that is going to finance them take the 4k that was paid towards the purchase price as part of the down paymnt... or will the tenant buyer have to come up with another 5, 10 or 20% down what ever the case may be for the down paymnt.... how can you structure it so they tenant buyer is not out of pocket soo much come time to actually buy the prop?
Typically they will, especially if you have a Loan Servicing Company collect the T/B's monthly rent which creates a more believable paper trail for the mortgage co.
Also, find a mortgage co. that'll give you a few bucks with each person they've given a loan to that you've brought them.
Thanks,
OTW
what if the tenant buyer were to get a first time home buyers deal like some ive seen that only require 5% down... can the tenant buyer use the 4k option consideration that was put down as part of that 5% so on 140k they only need to come up with another 3k (4k + 3K = 7k)= 5% of 140k?
Hi,
Develop a relationship with a local lender. I work with one here in VA that will treat the tenant/buyers purchase as a refinance rather than a new loan. The tenant/buyer must show that they have made at least 12 payments all on time. In addition, I try to structure my l/o deal so that the tenan/buyer will have 8% or more equity in the house by the time they are ready to purchase.
-CH
You should give rental credit to help bridge the gap (offer double credit in exchange for higher rent). If need be, you can always take back a small second to make the deal work (no interest, no payments, with a five-year balloon).