Has anyone sold their home to a home investor, to lease/subleae until they can find a buyer?

My duplex home has been on the market for almost 6 months, with no activity, due to the Chicago area hosuing market being so bad. I need to sell, as my husband & I have another home (we were married earlier this year). A home investor has contacted me, and is duscussing possibility of leasing it from me with option to sublease to a family whom isn't yet able to be approved for a loan - but will eventually turn into them (the family) buying my home. Sounds risky to me, as it may take up to 3 years, and this investor may bail on me...has anyone ever dealt with home vestors before for advice?

Run Forrest, Run.

Don't even think about it.

Lol, the Gump advice is proper.
If all you are looking for is rental income go ahead and create a month to month agreement and keep the house on the market until it sells. You don't need anyone else to do what the investor is proposing.

In real estate there are two very important axioms forming one very important expression:

"You - the Seller - name the price; we - the Buyer - name the terms.
You - the Seller - name the terms; we - the Buyer - name the price.

Are you being offered full price for your property?
Are you naming the terms for the sale?

I CAN ALMOST GUARANTEE you this: YOU ARE NOT naming the price AND The terms, are you?

Consult a reputable real estate broker or a reputable real estate attorney.

I was an investor. I belonged to a very select group of investors. We kept our word - to the Sellers AND the tenants we rented to.

Thanks for asking your Q. I enjoyed taking the time to answer it.

VTY,
Ron Berue
Yes, that is my real last name.

Go Cubbys!!!

OK now for your question. Absolutely do not do this. Think about it this way, what risk is the "investor" taking? He is not an investor if he doesn't invest anything. He is a parasite, looking to gain on your misfortune. If there is money to be made in this transaction it is rightfully yours and not that of some third party coming on the scene with a no lose proposition for himself. What happens when he doesn't pay the taxes or the water bill or maintain the property? What happens if he collects the rents but doesn't pay the mortgage payment?

Hire a reputable management company if you wish to rent your property.

Best of luck to you.

I have dealt with an investor and in the beginning everything seemed to be ok, but it the end he was trouble. He tried to control everything and then I told him I wasn't interested in selling the property to him and he toldme I had signed a contract. I hadn't of course, and he thought he could bully his way in. Lucky for me I have been in real estate for 16 yrs and although I wasn't licensed he wasn't going to get past what I wanted from him. Now not all investors are like that of course, but beware when they want to sublease because they can slip in a contingency that states "until they can find a buyer" like you mentioned or they can put AN/OR ASSIGNS where they put their name of the contract. Be very very careful and I suggest you check this website out and try working with them. The company is well known and they have real investors who don't try to take advantage of you. They come to you, look over the property and tell you what they will offer you. If you don't like the offer that is fine. No problems, no pressure and I have found that they are really nice to work with. Also they are a franchise but the whole idea behind the company was that the founder wanted to truly help those who needed to sell quickly.

http://www.homevestors.com/aboutus.php


Hope this helps.....

I am an investor and I'll share some thoughts.

Leasing for a sublease as an option to buy could be a good situation - depending on all of the details. You've identified the main issue - the reliability of the investor.

Some investors have been doing this for years - even decades, and are very good at finding reliable sublettors. The good part about this, is it does push off financial problems for a time, so even if it falls apart in 1-2 years, there would be a good chance the housing market would turn around by then and you could maybe turn your property into a permanent rental or have a chance to sell it again.

The problem is a lot of real estate "gurus" hype this technique in their seminars and ebooks and a lot of wide-eyed but inexperienced wannabe investors use this - often times in the wrong situation. An experienced investor knows they need to be carfeul of who they sublet to, but the inexperienced "Guru Gorilla" will sublease to literally anyone who will sign an agreement with them. So they can get someone in your house that might be incredible reliable or tear your place up.

So I'd consider doing a few things - check out this investor and ask to talk to some past sellers who have worked with them, and check some of the houses he currently has subletted to see if they are being kept in good shape.

I would insist on having veto authority to disapprove a particular sublet applicant.

The investor is responsible for payments even if the sublet is late on payments.

Consider doing a lease to own yourself. After all, if the investor can find someone to lease the house and get you out of your problem, why can't you?

Good luck

Sounds like he wants to try and make money on your home and if it doesn't work you're stuck with the note. 3 years is too much risk. If you really want to move your property go to www.platinumreic.com and see what they can do to help. This is all they do

put a ad in the paper to lease the house you should get a few answer rather quickly.

There's less than 1% of investors that know how to do this without putting you at risk. There are many pitfalls to this strategy BUT they can be avoided if the investor is well versed in the use of land trusts.

Ask him..
1. Will you be getting an "Option Deposit" from your potential buyer?
2. Will you be offering them "Rent Credits"?
3. Will you be setting their purchase price at the beginning of their Lease/Option period?
4. Will you be getting me to place the property in a land trust to protect it against judgements against you (the investor), me (so as to protect his buyers) or your buyers?

If he answers "Yes" to any of the first three what he is proposing violates the "DUE ON SALE" admonitions in your mortgage and the mortgage company can (and increasingly more often does) call the loan due in full.

If he answers "NO" to number 4, he isn't educated enough to even protect himself, much less you.

Scared? Don't be. There is a way to do this safely and sanely. If you're interested, contact me. We can make you a full or near full price offer, relieve you of the burden of being a landlord and keep you from violating the DOS clause in your loan.

BTW, I do this daily and it's the core of my business. I do require at least a 3 year term. It takes at least 15-18 months to build someone with marginal credit up enough to get them refinanced.

As for all these naysayers on Y!A, are they gonna pay your mortgage for you? Thought not.