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How to Structure and Offer Rent-To-Own Home Deals

Mar 05, 2021

Structuring & Offering Lease-To-Own Deals



Future homeowners searching for their next residence will often purchase it with the traditional financing plan of a mortgage and a down payment. But what if you have a prospective buyer who can’t get a mortgage due to their income or credit score? Or what if you are the buyer, and you just don’t want to shell out tens of thousands of dollars in interest payments to the bank? As it turns out, there is still a way to purchase or sell a home without getting the bank involved. How to Structure and Offer Rent-to-Own Home Deals

  • Draft a Purchase Price Agreement
  • Create a Rental Agreement
  • Apply Rent to Principal

That may sound a bit strange to American consumers who have almost universally are taught to believe that a down payment and a mortgage is the only way to buy a home.

 

These types of arrangements typically work like this:

The Traditional Mortgage Method

A homeowner decides they want to sell their home. This seller...

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Real Estate Responsibilities: Understanding the Legal Requirements of Real Estate Investing

Feb 26, 2021

Legal Requirements of Real Estate Investing

Rental rates are high right now, and investing in real property to rent may be tempting. Here are the legal considerations of owning and maintaining a rental property, from the office of a top Philadelphia bankruptcy attorney.

The Lease 

A lease is a contract between you and your tenant that sets forth the terms of renting the property. It may be a one-year lease or longer and can establish the terms of automatic renewal if you wish.

 

Every state differs as to required provisions and lease terms, however, a typical lease will include:

 

  • The names and addresses of the landlord (“lessor”), tenants (“lessees”). and the contact information for the property manager or company if applicable;
  • The rental property address (“the premises”) and details such as whether there is an off-street parking space, storage, furnishings, and use of outdoor space or common areas;
  • The beginning and end...
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The Answer To: Can I Use a VA Loan After a Short Sale?

Feb 19, 2021

Using a VA Loan After a Short Sale

Having to execute a short sale on a VA-backed property can be extremely disappointing and heartbreaking. It may have you wondering if you’ve ruined your chances of purchases another home with a VA loan. That is not the case—there is hope! So, let’s break it down and talk about how and if you can use your VA loan after a short sale.

Short sales, Foreclosures, and deed-in-lieu of foreclosures are not the same thing. The difference in these terms could help determine your eligibility to reuse your VA loan later. For now, let’s highlight the difference in these terms:

Short Sale

A short sale is when a lender (in our case, a VA lender) allows the borrower to sell the home for less than what they owe on the property. That is better than foreclosure for the lender because they can at least recoup some of the loan amounts. Foreclosures can be very costly—in both time and money, so short sales are preferable if one must choose....

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5 Interesting Trends Shaping Today's Apartment Rentals

Feb 12, 2021

5 Interesting Trends Shaping Today's Apartment Rentals

Being a landlord or a real estate investor means entering a highly lucrative market where the growing population opts for rentals more than ever before. With increased demand comes more competition--and your apartment needs to match the needs of your target audience. As with every generation, your potential tenants in 2021 will look for very specific kinds of rentals with the latest features available. After all, renting an apartment is often a long-term investment, and it requires thorough research before you can find that perfect match that feels like home.

As a landlord, it’s up to you to create that feeling of warmth and to embrace the more advanced, innovative tech ideas and security precautions. Plus, there are various design and architecture trends dominating the market that are worth noting for when you’re about to renovate. Here, we’ll go over a few of the most prominent trends for...

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Using Real Estate Investing to Fund College

Feb 05, 2021

How to Fund Your Child's College With Real Estate

If you’re like me, your house is a cluttered jungle of toy-parts sprinkled haphazardly throughout. Bikes to the left, toy cars to the right, and of course the pointed block right in the walking path! I call this the Good Morning, Dad block. If you think coffee is a stimulant, try a Melissa and Doug block to the arch-of-the-foot at 6AM. That, my friends, will get your blood pumping. 


While parenting has its share of trials, I feel most of us would agree that it’s worth every minute. We all want the best things for our children. These days, whether college is the best direction for children is debatable. Does college lead to a fulfilling career driven by happiness but also yielding a living wage? For some, absolutely. College can still be a fabulous investment. For others, it will be an utter waste of time.

I’m not writing this to defend the merits of higher education. Quite frankly, I think it’s a broken...

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5 Important Investments That Every Veteran Should Make

Jan 29, 2021

5 Investment Opportunities for Veterans

Returning to civilian life after active duty can be confusing and somewhat daunting. Whether you have been in the military for many years or if you have returned home after a grueling tour, adjusting to your previous life is definitely not an easy task. While there is a myriad of questions you need to answer and many issues you need to tackle during this adjustment period, one of the most pressing questions is how to achieve financial freedom for your family.

Achieving financial stability can seem like a huge task for a veteran, but you can achieve it by creating passive income and even returning to the workforce. Most importantly, to achieve financial stability and freedom down the road, you need to make the right investments in your professional and personal realms. 

These investments range from setting up a retirement plan to actively investing in real estate, but this can also include upskilling and getting certified to take on...

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Understanding Your VA Non-Allowable Fees

Jan 23, 2021

Understanding Your VA Non-Allowable Fees

Using your VA Loan benefit may seem daunting at first, but it’s important to understand as many aspects of this benefit as possible. One of the great things about the VA Loan is that it minimizes closing costs for the veteran. Non-allowable fees are one of the ways that this is done.

What are the VA Non-Allowable Fees?

The VA Loan Non-Allowable Fees are fees that veteran borrowers cannot pay during the VA loan process. These fees can also be difficult to calculate due to the fluidity of the situation. Items that impact the fees are:

* What state the loan is originated in
* The specific lender’s fee structure
* The VA Loan Amount

VA Fees that cannot be charged by the lender ( when charged the 1% origination fee) are:

* Application fees
* Attorney Fees
* Home inspections ordered by the lender
* Home appraisals required by the lender
* Notary fees
* Real estate agent fees
* Property tax service
* Postage fees
* Mortgage rate lock fees
...

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8 Crazy Tax Benefits of Owning Real Estate

Jan 15, 2021

Kevin Brenner, ADPI Hero, Capt, USAF / @investorkev

“If you get up early, work hard, and pay your taxes, you will get ahead-if you strike oil.” - J. Paul Getty

Disclaimer:

I am not a certified tax advisor, nor do I aspire to be one. This blog should not be used or be considered professional tax advice. I highly recommend consulting with a tax professional to obtain specific tax advice tailored to your financial goals and aspirations. The below thoughts are of my own opinion and should not be considered legal advice in any way, shape, or form.

Now that we got that out of the way...

Let’s talk taxes! Yay everyone’s favorite subject! Who doesn’t love forking over your hard-earned cash to the government so they can maybe get around to fixing that pothole that’s single-handedly thrown your car’s alignment out of whack?  

Well, the truth is, taxes are important. Taxes help fund necessary programs and keep local municipalities alive. They...

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How to Buy Real Estate With an LLC

Jan 08, 2021

Buying Real Estate With an LLC

Real estate investors know they should acquire property in an LLC. But why buy in your own name if you’re going to turn around and deed it into an LLC? This raises the question of how to actually buy property in the name of an LLC.

LLCs and Financing

Ultimately, a big component of whether you’ll be able to close directly within an LLC is the financing involved, if any.

If you’re buying with cash, then closing in your LLC will present no issues. If you’re using traditional financing (Freddie/Fannie loan), and if the property itself is residential, then you’ll be required to close in your own name. Buying that property in an LLC is a non-starter. Don’t even attempt to put a deal together in your LLC if you’re using a traditional Freddie/Fannie loan.

This is not the case if you’re using a community lender (not Freddie/Fannie), called a portfolio loan. These types of loans are different from traditional loans...

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Home Warranties: Are They Worth It?

Dec 24, 2020

Buying a Home Warranty

One of the things a real estate agent should discuss with you during your home purchase is the home warranty. A home warranty can potentially alleviate financial strain during homeownership, but is it worth it?

What is a Home Warranty?

Although sometimes mistaken for an insurance policy--a home warranty provides a service contract through selected vendors for replacement or repair of things such as: major appliances, HVAC systems, plumbing, etc. Unlike insurance, home warranties do not cover structural features or damage from a flood, fire, theft, or other natural disasters.

The items covered by home warranties are meant to be in good working condition but may break down because of normal wear and tear. Home warranties can help with larger issues like HVAC repair/replacement or septic issues (note that septic is usually an additional fee and has limited coverage by home warranty companies).

Are Home Warranties Worth It?

Most home warranties can cost from $350...

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