Real Estate Lease Option Danger
Posted by Mark Walters
Why investors must carefully chose renter/optionees to avoid
legal problems
Why are real estate investors having so much success
offering "rent to own" homes? Lease-options offer home ownership opportunities
to folks with little cash and not so hot credit. Oh boy, there are plenty of those around. Both parties in a lease-option deal are counting on the
buyer being able to qualify for a home loan before the
option expires. The investor wants to collect his profit when the optionee buys. The optionee wants to own the home. During the lease period the renter/optionee must be
working to improve their credit score to the point
where they can qualify for a loan and buy the home. Even though there is plenty of subprime loan money
floating around at the present time... the lease-option
method of acquiring a home seems to appeal to many. In our own investing program.... Before we accept
someone for a lease-option deal we have them interviewed
by our friendly loan broker. He gives us thumbs up
or thumbs down on whether our prospective buyers has a
chance to qualify for a mortgage loan loan during the
next 12 to 24 months. It would be unetical and dishonest to enter into a
lease option deal with a couple whose credit could never
be cured even with a miracle drug. We are not aware that it has happened, but we fully
expect to see a lawsuit filed against some careless investor
who does a lease option deal with someone whose credit
is beyond redemption. That renter/optionee has been lead to believe he can buy the
home and when he finds out he can't we are sure some
hungry lawyer will rush to their rescue. We can visit that investor in jail and bring him a copy
of a "no money down" book with a file hidden inside. About The Author -
Mark Walters is a real estate investor and author. His published works can be found at his web site...
http://www.CashFlowInstitute.com
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