Anyone had any luck with rent-to-own homes?

[DazedNconfussed]

So I keep seeing the rent-to-own shit on craigslist (Nor-cal specificaly), has anyone been through the process? Is it as easy as the only requirement is the down payment and get a loan within the rental period. Do they care about employment history or credit? Is there any hidden fee's or loop holes they screw you on?

Also, next question would be finding a loan within the 2-4 years they give you....I remeber back in my realestate days you could get stated loans with enough money down and they didnt care about credit....Are there lenders still out there that will loan say 300k with 25-30% down, or would you be looking at private investors at that point.

I am just looking for my home in the mountains on a few acres eventually....hate city living....

 

[Builtaforest]

They don't really care as much in general on your histories or credit. To move in, you usually put a nice downpayment in the neighborhood of 5-10%. If you should decide not to purchase the home in the end, you do lose this. Then you pay your monthly rent and usually a portion of it(25-50%) is applied as a credit towards your final purchase price. Terms such as payment length, final purchase date etc are decided beforehand.

Not too many pitfalls if you are actually in the market for one, meaning you have bad credit, no financing, or other negatives. These homes do come at a slight premium to true market value, as well as sometimes slightly higher rents (but remember, you do receive a rent credit). and in the end, if you decide to move on, your downpayment is lost, and it will have just been a simple rental.

my thoughts are kinda jumbled but let me know if i can be of more help or for clarification

 

[Donnybrook]

Just as a Potential Buyer is checked out by a seller if you do by chance land a home that interests you before you proceed . Check out the Seller as well as do some research at yer County's Register of Deeds office & make sure their is no Encumbrances against the Owner & or Property making it an Upside-down purchase ( A.K.A. as a Title Search ) Something You Yourself can do for free or Minimal expense . He can Never Owe More than You owe him . Make sure the potential seller does Not Owe more on the property than he's asking or that any possible Liens Do Not Exceed the Purchase Price You may pay . A good rule-o-thumb is , A higher down-payment warrants a lower purchase price & vise versa .

Make CERTAIN Everything is spelled out in Black & White Precisely before any contract is entered into . A wise choice would be to invest into a Good Real Estate Lawyer to look over everything before signing , Or at least a Friend er Relative that is a Real Estate Broker to make sure You are Protected . Also check yer State Laws regarding the Maximum Interest Rate a seller can charge in a Land Contract , Otherwise it's Usury as well as an Illegal Contract from the get-go .

A little free footwork on yer part will save on Unforeseen Headaches down the road . I would highly suggest you also consider getting any & all home Inspections Prior to entering into a contract spelling out Specifically who is responsible for any needed Code Required Improvements/Repairs that the home may need to obtain a Mortgage down the road .

Worst case scenario is if you go to Mortgage a home down the road & Required Improvements are needed before a lender will make a mortgage , Who in fact will pay for those Improvements , Buyer or Seller ?

Also consider any other Inspections/Repairs that may be needed as in , Well & Septic , Mechanical , Structural . If city watter & sewer , Electric , Gas then is their any outstanding balance owed .If a well & septic system is used then I suggest you pay for yer Local County Health Dept. do a water test & septic system inspection , This small fee by you is cheap Insurance on yer part to ensure no surprises as in a new well or septic system are needed or repairs at yer expense after the fact when ya lea$t expect it .

I also highly suggest a seller provide you with Title Insurance Policy or Updated policy upon entering into a Land Contract down the road .

Just Make Certain Everything is Spelled Out up front with No Surprises down the road . Set ALL terms in stone before you agree to the terms & conditions or Forever Hold yer Peace .

The Best O'Luck & I hope I didn't confuse the feck out-o-you ,,,

 

[Seamaiden]

Donnybrook makes excellent points, and I would like to add that out here (also in Cali) I am reading about a lot of cases where people take over foreclosed homes that they don't own, then proceed to sell them. The 'buyer' ends up with worse than nothing, their clocks have been cleaned because the title is completely encumbered.

 

[DazedNconfussed]

Hey thanks for all the advise....

I have found real estate investors that say you find a home, we all come to an agreement on the down, monthly, and purchase price and they buy the home in their name, then we have a contract between us. At least thats what there ad's say.

So a real estate lawyer is a must then to go over the contract and title insurance to make sure they own the place without hidden liens.

also I would definatly pay for a home inspection.

The way I see it is I typicaly for a rental lay down around 3k-4k to get in, and a rent to own would be 10-15k, so more down and a few more a month...

but the benifits I am looking at are from my point of view are:

No landlords to come out and bug me during the 2-3 years of the rent to own period. So I could throw up a green house, and do my indoor shit and do as I wish without being bothered or the anxiety which would more then pay the difference pretty quick.

If shit happens and home prices plumet I can simply walk away at the end...I know Ill loose my down and the extra money I pay each month, but buying a home in my name id still have to put money down, and then have my credit effected even more, have forclosure to deal with....shit like that....but if the purchase price in the 2-3 years is way over its appraised value, seems alot easier to walk.

Allthough my intentions are to put enough away to buy the place.

I just hate the anxiety of renting homes and growing. I really want to run vert light indoor, and a green house outdoor. I cant see trying my hand at outdoor in a rental situation. Right now my grows are designed to be able to be taken down and moved with 24 hours.

I just need to make sure theres no chance the owners are gonna get forclosed on while im in the home. I have had this happen to 3 homes in the last 4 years I have rented.

 

[Donnybrook]

Sounds like a plan Dazed ,

Dot the I's & cross the T's before ya take the plunge . The good thing is the market is Depressed & not Recessed as the feckin press would lead us to believe .I can only imagine even with Today's prices a place like yer looking for is a pretty penny .

Good Luck & I hope ya find the place-o-yer Dreams ,,,