I have been receiving a few calls from investors who feel housing prices have almost hit bottom and will begin to reboundin the spring so they are starting to seriously look at properties to buy. I have one investor who is looking at lower end properties to buy to flip allowing the buyers to using a land contract or a rent to own program. This would only work if the seller owned the property free and clear and work closely with a lender to pre-qualify buyers.
We came up with the idea of using seller financing during a recent lunch and expanded it to flip properties. This method would allow a renter to take pride in ownership and would still allow the seller to take back the property if the payments aren't being made. The seller could make 6 - 8% on his money with little to no risk. It would also help people who can't get conventional financing for whatever reason still be able to purchase a home.
At the end of the contract, if the renter couldn't get permanent financing, he or she could continue to rent without penalty or the seller could terminate the contract and sell the property to someone else. The buyer could opt for permanent financing at any time. There also would be minimal closing costs.
We still have a few kinks to work out and have to take a realistic look at the down side but it's an option my investor may want to pursue.
Is anyone using this concept?
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