What are some typical options for a Rent to own situation?

Question

I am wanting to sell my house to a freind and I want to give him some rent to own options.

Answer 1

Rent-to-own, AKA 'Contract-For-Deed' is a bad option for the buyer, it just sounds good to the ill-informed. If this person is truly your friend you will not do this to him or her. However, if it's more important to get some income from this property than to keep your friend, then I would proceed with the following.

1. A signed rent-to-own agreement.
2. Large, non-refundable, security deposit from the buyer. I would want $5000-$10000, depending on the size and value of the home.

This way, when (not if) I have my friend evicted I get to keep the security deposit and put the house on the market. This will undoubtedly give me the opportunity to make a new friend later.

Answer 2

i purchase & sell lined a super type of this, i will upload some suggestions. there are lots of horror memories to pass around related to RTO. between the greater heinous ones i'm responsive to is going like this: Couple enters RTO settlement, a down charge replaced into made, component to the money are to be utilized to down charge so on the top of the settlement, the couple can get carry of a 20% conventional own loan. Landlord looks slightly picky after awhile, doing month-to-month abode inspections and such. yet tenants stick it out, keeping the valuables, making well timed money and ignoring landlords antics. A tree branch is rubbing on the roof, tenant trims the dep. it incredibly is rubbing. Landlord includes the abode for his month-to-month inspection, whips out the settlement pointing out that no landscaping could be altered with out his consent and starts off the eviction, retaining their downpayment and dowmpayment contributions. Later, it incredibly is discovered that's the owner's MO, he obligates his RTO tenants to an just about impossible settlement, retains their money, and unearths somebody else to RTO, starts off the technique back. So, have an attorney evaluation the settlement previously you sign, ascertain it incredibly is a actual looking settlement to be held to.

Answer 3

Option 1 - Bank calls note due. Tell your friend "Oops! Sorry." Bank kicks him out.

Option 2 - Friend's dog eats back of house. Friend eventually cannot make payments. You kick friend out. You cannot get caught up. Bank kicks you out.

Option 3 - Friend's friends trash house. Friend leaves on his own. You cannot get caught up. Bank kicks you out.

Option 4 - Friend cannot get a loan after much trying. Friendship becomes strained. Payments not made. Bank kick you both out.

Answer 4

find a real estate attorney -- for a couple hundred bucks a paralegal can draw up anything and everything you want. and even though its a friend now - -it might not be a friend later. its best to go through an attorney to cover your butt and your friends in case you get wacky on him too.