# lease to own good or bad??



## mamato3 (Nov 1, 2008)

so we hubby and i cant get a home loan so we found a local guy who helps people with not so perfect credit. He will have a lender look at your credit and will tell you how many months, yrs it will take to be able to qualify for a home loan in the mean time we go out find the home we want and lease it for said amount of time with the intent to buy when the lease time is up. This way the monthly payments help us look good to lenders. He sounds like a good guy who is trying to help people out. Ive already asked him a ton of question and plan to meet with him in 2 weeks to talk and get my credit run and start looking at homes. So what should i do to make sure im not ripped of? I plan on trying to find a good lawyer that wont cost much to look over everything before i sign is there anything else i should do or ask?


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## Lizza (Nov 30, 2005)

mamato3 said:


> He sounds like a good guy who is trying to help people out.


This is the part that jumped out at me (not in a good way). Spend the money and see a lawyer before you sign anything, there are way too many variables and ways for you to loose money and the house you had been paying on. Don't sign anything or give this person any money until you have. Maybe even call a local real estate agent and ask them if they have heard of this man or his "leasing plan".


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## marvella (Oct 12, 2003)

morningstar said:


> This is the part that jumped out at me (not in a good way). Spend the money and see a lawyer before you sign anything, there are way too many variables and ways for you to loose money and the house you had been paying on. Don't sign anything or give this person any money until you have. Maybe even call a local real estate agent and ask them if they have heard of this man or his "leasing plan".


i agree. some realtors have found a niche market by selling to people with poor credit, knowing they will default. when you default you lose everything you put into it and it goes back to the seller, so he can do it again to someone else.

rent to own works if there is a good match between the two parties.


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## keyhole (Dec 2, 2008)

Many of these folks are either realtors or individuals that buy a property, fix it up, rent it out and make a few bucks off of it each month.

Check to see which one this individual is!! This sounds like someone that has read the Robert Kiyosaki books. (Rich Dad, Poor Dad)


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## Micheal (Jan 28, 2009)

mamato3 said:


> so we hubby and i cant get a home loan so we found a local guy who helps people with not so perfect credit.


What's he do for a living? Does he make money off helping you - if so how much?


> He will have a lender look at your credit


Why don't you just get your own credit report (for free) Better yet if you have applied for a home-loan and been rejected the place that rejected you should be able to tell you what their minimums for a loan are so you know how far off you are.


> and will tell you how many months, yrs it will take to be able to qualify for a home loan


So you are believing this "good person" can predict the future? The only way you (and hubby) will be able to qualify for a loan is to raise your credit score. Will making a lease payment for X amount of time help - maybe. But then again paying off any debt and making on-time payments to those you owe will also.......


> So what should i do to make sure im not ripped of?


Maybe talk to some of those he already helped - ask for names and check how they are doin'.


> I plan on trying to find a good lawyer that wont cost much to look over everything before i sign is there anything else i should do or ask?


Best thing I've read so far - go through a lawyer.
But hey, this is only my view of your post...........


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## Wylie Kyote (Dec 1, 2009)

Good advice Micheal. I hope momato3 takes note.


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## Mavors (Mar 30, 2007)

mamato3,

I'd really think twice about leasing to own. As mentioned by the others be sure you check out this person well. One thing to realize is that if anything happens....ie. bankrupt, forclosure, etc. You can loose all that you have built up into the lease to own deal.

I always suggest to live below your means to save up a reasonble deposit or full payment on property & home. By doing this you will have more security and no loan/mortgage means no change of forclosure due to life events.

I would never lease to own something.....be it appliances or property. Please think long and hard even if it is a deal that you can't pass up.

Best Wishes,
Mav


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## mamato3 (Nov 1, 2008)

Hey Thanks everyone forr you thoughts i do much appreciate them. He is in that we buy ugly homes bit his partner is a realtor. We will go talk to him and hear his side but after hearing your side i might go option B especially if i dont like his prices or payment options.


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## Mooselover (May 4, 2009)

i don't know anything about a lease to own. but i am doing a rent to own. i wouldn't have been able to get a traditional loan due to my employment history (took care of ex's mother for 3 years...needless to say after she passed i dumped his sorry-a**). i had a good down payment and paid for the inspection. i have to pay for all repairs and if i decide to sell next week, i can...deed is in my name. if i default, the owner takes the house. (i'm pretty sure that's what would be in his best interest. he gets my down and all of my monthly payments....free and clear and i lose a butt-load of $$. ) 

make sure you have a very clear understanding of how the contract works. the best part of my deal is that i can sell the house, recoup my $, and pay off the owner. whatever you do, get an inspection and read it very closely. (i found some things that bothered me but ONLY after i purchased the house because i didn't read the inspection closely)

financials...i agree with getting your free credit report from ALL 3 reporting agencies (but i think that one of the companies no longer offer it...??) and don't forget to get your FICO score. they say the bankers look at the FICO. if you have internet access, get on some good sites like kiplingers, bankrate, the dolans, etc to find out how the credit stuff works. and, don't be afraid to look at your credit score. you can dispute things that don't belong there. and, depending on your debt, all states have a SOL on collection of those debts. 

if you can, get a secured credit card. over a year ago, i got a secured credit card from First Bankcard. (excellent company!!) i pay it in full, on time, and never go above the 30% ratio. my FICO is 743, which is gosh-darn good. in 3 years, i'll qualify for a traditional loan from a bank. (if we still have a banking system and they're not so tight with their lending practices). whatever you do, trust few people in this transaction. most of these people are in it for their own interest. YOU do the research and asked lots and lots of pointed questions. 

keep us updated. i will be looking for your posts because i know exactly what you going thru and what your up against. there is light at the end of the tunnel. if i can do it, anyone can!!! moose-luck and prayers to you.


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## plowjockey (Aug 18, 2008)

mamato3 said:


> Hey Thanks everyone forr you thoughts i do much appreciate them. He is in that we buy ugly homes bit his partner is a realtor. We will go talk to him and hear his side but after hearing your side i might go option B especially if i dont like his prices or payment options.


You are wise to be very cautious.

Unless most or all of the "lease" payment, is put toward the purchase price of the house, It is basically renting under contract. 

When the lease ends, a potential lender should not care either way. They will want to know how much you can pay down and if you can make the mortgage payments, in addition to your other debts..

Who will own the property during the lease? Is "the guy" simply looking for an property investment opportunity, that he can have contract "leasee" to make his mortgage payments?

Good luck.


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## francismilker (Jan 12, 2006)

Whether you're buying a car or land, if you're planning on getting it paid for in this lifetime, by all means do it with a reputable lender. "Used car salesmen" types have an eye for picking someone out of a crowd that is hungry to make a purchase and know all the right things to say. 

First of all, as others have said, I'd check into the terms of the contract and have an attorney look it over. As a matter of fact, when you ask the salesman for a copy so you can take it to an attorney there's a good chance he'll crawdad on you and try to say something like, "there's no need in getting an attorney involved. It will just cost you more money." If this does happen, get up and walk away from the deal and don't look back. 
Second of all, I'd want it clear and in writing how much of your monthly payment will go towards the principal of the note. Some of thes "rent to own" deals sound to good to be true and infact are no different than credit card debt. 
Next, I'd find out what the payoff amount would be. Will there be penalties for early payoff? I'm not sure whether it's a good deal or not, but I've heard of folks with bad credit getting into one of these deals knowing there's no penalty for early payoff and using the land as colateral at a bank to borrow money under a conventional land loan to pay the landshark off. Once again, I'm not sure if this is a good idea or not. You'll end up paying more loan fees this way.


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## Reauxman (Sep 14, 2002)

My experience is that these rarely work out unless it is a very low dollar home.

If you cannot afford a down payment and closing cost, you likely cannot afford payments. I've set so many people up with these against me better judgement, and they never work out.


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## mamato3 (Nov 1, 2008)

after talking to them were going to pass dad has allowed us to stay here and sell this mobile and get a different one. I really was wanting to get away from mobiles but thats the only thing we can get a small loan for go figure. Thanks everyone for your help.


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## Forest Breath (Oct 23, 2009)

It can be done and done successfully. I heard from my land attorney that this is being done more now than in the past due to various reasons. He does the contracts for people and I considered this when I bought our farm, I discussed it with him at length and as long as you are careful and have an attorney, you are OK with this. 

The thing you need to do is check on the guy making the offer, talk to him, take notes and tell him you plan to have a good attorney that specializes in lease purchase agreements to oversee the contract. Then inform him that you have a friend who made a bad mistake doing something like this, the contract was not valid in court, one owner died and she not only lost her farm, but had to tear down the home she built and move it in 10 days and had almost $20,000 in legal fees getting it straightened out. So because of her bad choices and horrible mistake...you will learn from it and make sure that your family does not suffer through that. 

Get yourself an attorney, most will do a lease purchase agreement for you for under $500.00. Trust me, it is worth it. In addition, you must tell the attorney you want it put in the agreement that the heirs are bound to the contract in case of death...DO NOT LEAVE THIS PART OUT! After signing the contract take your original to the court house in the town where the house is and file it in court. It will cost about $4.00 a page to get it filed but will be worth it because you will have legal evidence of the binding contract in case it is ever needed in the future. 

You CANNOT be too careful with this. DO NOT....move forward with anything until the contract is signed by both parties and filed in court. Seriously do not as much as decide on a paint color for a bedroom wall. GET THE PAPERWORK DONE 1st!!!!!!! Save yourself a heartache that most cannot endure and live through. 

I understand your situation and again, I have a very good and very expensive attorney, who was a D.A. for almost 30 years, tell me these contracts can end happily for both parties and can be a good thing IF DONE CORRECTLY AND LEGALLY! 

Finally...NEVER take someone's word on a handshake and a promise. It should ALWAYS be backed up with a signature, even if it is your best friend. Otherwise, you are just at the mercy of fate and fate may not be too kind to you!


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## Forest Breath (Oct 23, 2009)

mamato3 said:


> after talking to them were going to pass dad has allowed us to stay here and sell this mobile and get a different one. I really was wanting to get away from mobiles but thats the only thing we can get a small loan for go figure. Thanks everyone for your help.


You can often build a small home for what a mobile home costs so you may want to look into that as well. Start with a few rooms and add on as you can afford it, if you plan on keeping the land.


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## ChristieAcres (Apr 11, 2009)

Lease to Own Real Estate Contracts can be a great way to go! A Lease Purchase Contract is seen by a Lender as payment history (Loan Officer here). It boils down to having a Lease Purchase Option OR Lease Purchase Real Estate Agreement written up by an Attorney OR using your own State's Forms OR using a Licensed Real Estate Agent (Real Estate Agent here, too). I helped a number of couples with credit issues, restore their credit, increase their scores, and helped them gain the financing to purchase their homes. 

Great advice, Forest Breath!

Here, you can get a remodel permit through L & I and do an incredible remodel on an existing mobile home. It is far less complicated to be permitted. That is actually our future plan! Since the only item on our criteria list that wasn't met was a little cabin/farmhouse? We can eventually build on to the existing 16 X 16 separate building that is built to code up against the end of the doublewide mobile. It has a good roof and was nicely refinished, so there is no rush on remodeling it, yet.


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## FoxyWench (Jan 22, 2010)

im actually thinking of doing a lease/rent to own or owner finance situation but the owner of the property im looking into is a real estate agent...

i think the key to it working is to have a very clear cut contract and have the payment period be as short as possible, the one im looking at is over a span of 5 years.


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## txquilter (Dec 29, 2009)

I used to work for a guy like that. He was what is referred to as a "Real Estate Investor". They tend to charge VERY HIGH interest rates on their loans and ridiculous fees if you have a late payment. Be extremely cautious... Ask questions like, how long have you been in business? How many loans do you currently have? Do you sell your notes and if so, to who? How much of my lease payment will count towards a down payment? What type of deed will be produced? Will you own the property while I lease or someone else? How much of a down payment will you require on the lease to purchase plan? What are the terms of the lease? And on, and on.

They guy I used to work for was just this side of the gray line and from what I've see they are all kind of like this. I caution you to be VERY CAREFUL!

Good luck


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