My landlord wants to sell me the house I live in, but he wants to hold the mortgage, what are the pros/cons ?

Question

It is a 4 apartment house that is currently full. It's old and needs a lot of work, I'm not even sure if it's up to code. Any legal advice?

Answer 1

That is the ideal way to get into a place. No credit check, with a small down if any.

You can find out the cost of bringing the units up to code. Hire a licensed inspector to look at the property and tell you what is wrong with the property, also the approximate cost of any and all repair.

Another thing if the city has not done anything about the property so what make you think the properety is not up to code?

You might also see if the present owner will lower the price because of the necessary repairs. You also don't have to do all the repairs all at once they can be spread out over a period of time.

This method of finance is done all the time, there is nothing wrong with it. Private individuals carry back mortgages for a couple of reasons.

#1 There are tax breaks for not recieving all the proceedss from the sale of a house or apartment.

#2 There is a steady stream of monthly income that can be counted on.

#3 The money (Investment is covered by the house itself)

The advantages to you

#1 Normally no credit check

#2 Ownership of a property with little or no down or out of pocket espense.

#3 In your case you will have someone to assist you in making your mortgage payment.

You can be scared off by all sort of naysayers, but this is a great opportunity.

As far as someone foreclosing on you because you fail to make the mortgage payment. Would this not happen if you were financed by Bank of America or Country Wide. Just because it is a private party he still has to follow the foreclosure laws enacted in your state. If you fail to make a payment, yes from a private party or institution the first day they can foreclose on you and some do.

You have to make an intelligent decision as to what you want to do and if you think this will work for you. Someone will purchase the four units.

Guess what when they do they will send you a letter. The letter will say, We have now purchased this property, the rent will be increased by $50.00 per month.

Now you have to ask yourself this question, would you rather send the letter or get the letter.

I hope this has been of some use to you, good luck

"FIGHT ON"

Answer 2

If he holds the mortgage, if you default your contract even by 1 day he can legally take possession and you lose every dime. Unless of course you make ammendments to the contract.. Always have YOUR attorney set up the contract to cover you in all cases.. Worth the money spent.

The owner NOW is obligated by law to bring the buiding up to code BEFORE he can sell it.. but there are always ways around the law.. So be careful.

Answer 3

Yes don't do it. you will have to bring it up to code. If he is holding the note and you get behind it his again and belive me he will be quicker then a bank to take it from you. I have heard a few horror stories. Contact a real estate attorony aleast.
The olny pro i see is that if you have bad credit and he is truly doing it out of his nice pure good heart and he has to sell because of ........... but then again if he is selling to you and just taking payments then how is that helping him. I wopuld proced with extreame caution. In fact I know somebody you loves to sell there homes to tenents with bad credit carry the note and start to forclose on them the first day the are late. He keeps the down payment the payments which was high then if he just rented.

Answer 4

The other responses are good. But one thing I have not seen yet is you need to remember that even if all the apartments are currently full you need to make enough money to afford to pay for the property if it isn't allways full because trust me it won't allways be. Also their are more expenses than just the cost of it you'll need insurance, taxes, lawn mowing, maintenance, snow removal (depending on location), legal advice when you have to evict a tenant, cost to repair the place when a renter destroys it until you possibly recoup the cost by taking them to court. Also depending on how the leases are setup you might have to pay sewer, water, garbage, heat, etc also.

Answer 5

"Giving" the living house back to the lender is seen a foreclosure and your credit will mirror it as such. you would be able to desire to get imaginitive in today's industry. in case you at the instant can't sell or lease it outright, i might advise offering a "lease to possess" selection, being careful to have a useful real assets lawyer instruction manual you. carried out appropriate this gives you the two you and the aptitude client many reward. "client's" who won't be able to qualify for a private loan might have the possibility to possess a house, yet in the event that they defaulted, you will possibly nonetheless have the valuables. additionally, somebody who's leasing with the choice to purchase is plenty plenty greater in all probability to guard the valuables than somebody who's purely renting. this could be a trend it is growing to be to be greater straight forward in today's industry. Having an excellent real assets lawyer is had to the pastime of the two events. terrific of success and Congratulations!

Answer 6

It depends what rate of mortgage he is giving it to you. If the mortgage rates is cheaper than what banks or mortgage brokers can arrange than is fine. Please also do not ignore other privilege you can get from other financial institutions like prepayment privilege. Early renewal, Biweekly payments and legal expenses etc. Please also get your apartment checked by Building inspector and appraised by professional Appraiser. Do not forget to check the lease of other tenants. Good Luck.

Answer 7

Not legal, but practical advice: Before you accept his offer, pay the $$ to a general contractor to survey the house and roof to determine what repairs & renovations it might need & then make your decision.