Lease Purchase Solutions, Ltd.



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Rent 2 Own 
a San Diego Home

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Risks For The Tenant Buyer


How to Make Sure the Property Owner is Making His Mortgage Payments...

If you are leasing a property from an owner with an option to purchase (and especially if you are in a "sandwich" position wherein you are lease optioning property and subletting to a tenant), you want to make sure the seller is paying his mortgage. 

If he doesn't pay, you can get wiped out in the event of foreclosure. You can always make up his payments and deduct it from what you would otherwise owe him, but this could be more money than the deal is worth. You want to find out early if the seller is not making his payments. 

The easiest way to make certain that the seller is making his monthly payments is to setup an escrow. There are companies in every city which, for a monthly fee, will collect your payment and make the seller's payment for you. 

In San Diego we work with a Trustee company that not only collects your payment and makes the seller's payment each month but keeps track of the day of the month that you pay your rent so when it it time for you to exercise your option to purchase the Trustee can provide your "on time" payment history to your lender which will help you qualify for your loan.

 

Not All Tenant Buyers End Up Buying the Home...

30% of Individuals who attempt to buy homes on a lease-option end up not buying the home. This often has to do with the reason they try to buy on a lease-option. They usually cannot qualify for a home loan and expect that they will be able to qualify after a period of time. Later, they find they still cannot qualify - whether it is because of poor credit, lack of income (documentable income), or lack of savings to have a large enough down payment. 

If this happens, you lose any option money you might have paid up front or as part of your monthly payment.

 

 

 

 

 

Lease Purchase Solutions, Ltd.
Gar C. May
Real Estate Broker

CA DRE # 479003
gmay@san.rr.com
858-272-5510