Rent to own
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Rent to own (by John [VA]) Jul 11, 2019 6:18 PM
       Rent to own (by Richard [MI]) Jul 11, 2019 6:50 PM
       Rent to own (by Richard [MI]) Jul 11, 2019 7:01 PM
       Rent to own (by razorback_tim [AR]) Jul 11, 2019 7:13 PM
       Rent to own (by Deanna [TX]) Jul 11, 2019 7:33 PM
       Rent to own (by JR [ME]) Jul 11, 2019 7:40 PM
       Rent to own (by plenty [MO]) Jul 11, 2019 8:13 PM
       Rent to own (by beelocks [NH]) Jul 11, 2019 8:24 PM
       Rent to own (by BRAD 20,000 [IN]) Jul 11, 2019 8:27 PM
       Rent to own (by AllyM [NJ]) Jul 11, 2019 8:30 PM
       Rent to own (by JR [ME]) Jul 11, 2019 9:00 PM
       Rent to own (by Robert J [CA]) Jul 11, 2019 9:05 PM
       Rent to own (by BRAD 20,000 [IN]) Jul 12, 2019 2:13 AM
       Rent to own (by DJ [VA]) Jul 12, 2019 7:20 AM
       Rent to own (by DJ [VA]) Jul 12, 2019 7:23 AM
       Rent to own (by Oregon Woodsmoke [ID]) Jul 12, 2019 9:59 AM
       Rent to own (by Vee [OH]) Jul 12, 2019 11:18 AM
       Rent to own (by Nicole [PA]) Jul 12, 2019 11:48 AM
       Rent to own (by Blue [IL]) Jul 12, 2019 12:23 PM

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Rent to own (by John [VA]) Posted on: Jul 11, 2019 6:18 PM

I know I've asked something similar in the past but I found someone who wants to do a rent to own option with one of the rentals. I've heard a lot of good and bad things for both sides of the party. Heard it's great since you don't have to do any repairs and don't have to worry about commissions but also that they can still fall through, tare up the place, can still make you do certain repairs, and try to get back the deposit. Have any of you had good experiences with this? Below are some numbers :

His credit 530

Income base 50k

Annual avg Commissions 15k

Has been with the same job 3 years

Has good rental history

Would get a VA loan (heard those AR ea lot more strict than traditional loans)

He is also going to have his brother and brothers 3 children residing

Would do 5k down, purchase price set at 320k next year(appraised value) , pay 1400 a month which is my mortgage.

Or I could just sell now lose close to 30k in commissions and fees but have heard rent to owns rarely go through.

Rent to own (by Richard [MI]) Posted on: Jul 11, 2019 6:50 PM

I would pass on this prospective deal. Especially at 320K.

There are so many ways this can go wrong I hesitate to even start.

Rent to own (by Richard [MI]) Posted on: Jul 11, 2019 7:01 PM

If the house is worth 320K, I'd sell now while the market is good. If you wait and try to get the last dollar, the market could turn.

If you still want to do rentals, try a lower priced market with your money from the sale. Maybe try a plex so an empty won't mean zero income.

That value for your place puts it at a level only about the top 10 or 15 percent can afford.

DO NOT do a deal with that proactive tenant. There's red flags ALL OVER IT!!

Rent to own (by razorback_tim [AR]) Posted on: Jul 11, 2019 7:13 PM

I have done several lease with option to purchase deals.

I don't know what the median price of your market is, so it's not an apples to apples comparison, but there is no way here I would to a lease with an option on a $320,000 house with only $5K down. I would be looking for a minimum of 5% or $15-20K.

I would also want his rent to be comparable to what his total payment would be if he were purchasing with a mortgage, which is well beyond $1400.

IMO, one-off lease options typically aren't a good idea. If you're going to do it you need to make it part of your overall business program. --70.178.x.xx

Rent to own (by Deanna [TX]) Posted on: Jul 11, 2019 7:33 PM

See if you can find a flat-fee agent. They advertise all over DFW-- presumably someone has a similar gimmick in your area.

Deal with a person who can buy it outright, get your money, and do something good with it. Don't drag it out.

You want your money, today.

Rent to own (by JR [ME]) Posted on: Jul 11, 2019 7:40 PM

Nooooooo! 500 is an unusually crappy credit score. This will end badly for you.

Rent to own (by plenty [MO]) Posted on: Jul 11, 2019 8:13 PM

My mind said No as soon as i read the first line... low credit score. Next was VA loan... will your house pass after he has lived there X number of days. Or will your house qualify after you spend X dollars to fix up beyond the rental necessities. No. I would not do it with the circumstances.

Rent to own (by beelocks [NH]) Posted on: Jul 11, 2019 8:24 PM

Such a small amount of skin in the game means he gets a huge discount to stay there for 6 months without paying you a single monthly payment. If he were renting for 6 months you'd have $8k out of him.

The $5k downpayment might as well go straight to your attorney for the foreclosure paperwork that you'll be doing within 6 months. After you spend another $10-15k on repairs after he trashes the place you might be back to where you started from today.

Rent to own (by BRAD 20,000 [IN]) Posted on: Jul 11, 2019 8:27 PM


First blush - why only $1400 /mo for a $320K home? Sounds AWFULLY cheap to me. Should be closer to $3200/mo.

And you're only breaking even on the mortgage payment? What about repairs and vacancies etc?

He's not really a buyer, just an asker. He's pushing yoru GREED button to convince you to take him despite his troubles. He will not be a real buyer so don't put yourself thru the paces.

Either rent it for a profit or sell it. Generally speaking NOW is a very good time to sell.

We do rent to own on all our SFHs. Out of 1,000 RTOs *2* have gotten a mortgage and paid us off. Most leave for life reasons such as split or divorce.

Repair: some folks do some repairs but others leave the house because it needs so many repairs (that they did not do!) Now *I* have a big list at turnover. Aggravating but do-able.

In MY state, check YOUR laws, I get to keep every penny of their NON-REFUNDABLE OPTION FEE, making this business model very profitable. We use the RTO as a hook to get their attention away from normal rentals. It's totally their choice, I'm not forcing anyone, I'm giving them a CHANCE to pursue their dream when others turn them away.


Rent to own (by AllyM [NJ]) Posted on: Jul 11, 2019 8:30 PM

He just sounds like one of those tenants who want to have that ownership feeling without actually paying for the place. I had a few who said "We would like to buy this." And I had their credit report so I knew there was no way. I always say no right away because the first ones who asked, and I said, I would think about it, started acting like THEY were the owners. It's not easy to be a landlord when some trashy tenant pretends they own it.

Rent to own (by JR [ME]) Posted on: Jul 11, 2019 9:00 PM

And another thing, a man earning $65k in his best year can not afford a $320k house. It would be lunacy on your part to go through with this.

The mere fact you are considering it shows you are in over your head in making this decision. Sell.

Rent to own (by Robert J [CA]) Posted on: Jul 11, 2019 9:05 PM

Nothing that ANYONE has ever told you about Rent-TO-Own situations are true it it means less work, fewer worries or your not Completely Responsible to keep up the rental.

Rent-To-Own is just a "document, lease or agreement" subject to the courts interpretation. In many jurisdictions a tenant under contractor to purchase a property is an "Owner by Contract" and you can't just evict them for non-payment of rent.


Rent to own (by BRAD 20,000 [IN]) Posted on: Jul 12, 2019 2:13 AM


I suspect he assumes like most that every penny of his payment goes to principle.


Rent to own (by DJ [VA]) Posted on: Jul 12, 2019 7:20 AM

I agree with everyone else. NO, NO, NO!! RUN!

AND your thinking is VERY wrong:

>What is the definition of "rent to own"?

>I have done a successful Lease-Option before. Two separate sets of documents and transactions. (but NOT with someone in this situation)

>Insufficient income for the price

>Insufficient credit to get ANY loan in a year - or several

>WAY too little rent -you'll lose money every month, BEFORE repairs. You can't set the rent at just the cost of the mortgage! Do you intend to ever make money?

Please save yourself- hire a Realtor and sell it for retail now, while you can

Rent to own (by DJ [VA]) Posted on: Jul 12, 2019 7:23 AM

Oh! And you know it"s really for the brother and his kids - can't even imagine what HIS income/credit look like(do you know?)- if his brother is the front man

Rent to own (by Oregon Woodsmoke [ID]) Posted on: Jul 12, 2019 9:59 AM

His credit score is 530 and he has $5,000 to put down. And you are considering loaning him $320,000?

Do you even listen to yourself when you talk?

Most landlords wouldn't accept him as a tenant, let alone actually give him a house and hope he pays for it.

If he can get a VA mortgage in one year, he can get one now. If he can't get one now, whatever the problem is, he won't be able to fix it in one year.

Rent to own (by Vee [OH]) Posted on: Jul 12, 2019 11:18 AM

The only way it makes sense to me is to raise the option fee to 315,000 and when it all goes down with a puff of smoke transfer the deed and forgive the 5,000 with a 1099. The law of averages is against you horribly, but if you are desperate marry the tenant and begin divorce 6 weeks later so you can be rid of both.

Rent to own (by Nicole [PA]) Posted on: Jul 12, 2019 11:48 AM

I am much more (pick one) easy, flexible, adaptive, compromising, etc., than most on here.

I would not have anything to do with this guy as a potential buyer nor as a tenant in a house this expensive.

Disclaimer - I know nothing about houses that cost $320,000 in a rental situation

Rent to own (by Blue [IL]) Posted on: Jul 12, 2019 12:23 PM


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