OfflineHello everyone! I am new to this and i have been considering aquiring lease options. I pretty much understand most of what needs to be done but i have one important question. If i were to get a property where the owner will carry the note, how would i know that he is paying the mortgage when i give him or her monthly payment? Is there a way to keep track of something like this without offending the seller? I have a family friend who moved into a beautiful home where the owner carried back the note and after a big down payment and some months went by, they recieved a notice to vacate the home because the owner was not making the payments and the bank had to forclose on the property. Come to find out, the owner had filed for bankruptcy. I really worry about something like that. Can anyone share something with me about this?
Thanks and God bless!!
One more question. Exactly which forms should i arm myself with to make an owner financed deal happen. then lease out the property? Thanks for any input!
Mikerod.
Was it Reagan who said, "trust, but verify".
Legal documents that an atty as drawn up or looked over is a way to avoid what happened to your friend.
We've bought Several properties on contract for deed(they keep the mortgage, I get ownership).
My atty said, pay directly yourself, or do direct deposits into an account(escrow or otherwise), then have the mortgage holder's company debit that account each month on automatic payment.
One solution. There are other ways to assure your payments are getting there. NEVER, they say, pay directly to the seller without some accountability.
hope this helps.
P.s. don't worry about offending the seller, your doing him/her a favor, solving a problem. AND remind the seller that, if you were to default, he gets to keep the down payment and all others, forecloses on you and gets his property back with all upgrades and repairs, 99% of the time in way better shape than when you took it over.
crosstown looker
I believe Grady gave some great advice about setting up an escrow service to ensure the payments are being made. You can inform the seller this will also provide him with worry free responsiblity each month while the payments are being made. You can also inform the seller that you are just trying to keep it simple for the seller:)
Also, you may want to check into your area and see if you can record your option with the local county recorder's office. Your option on file will also prevent the seller from selling the property. The recorded option will be your red flag in the event something like this should come up in the future. Good luck on all your deals! Believe and Achieve!
Indiana-Joe
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Thank you Grady! That was some real "meat and potatoes" insight. I understand now that i do have some options. Appreciate it very much!
wish you continued prosperity!
Thank you Indiana-Joe for the reenforcement. I found it very informative and useful to protect myself and all parties. I WILL file my option always, now that i know i can! Thank you.
Wishing you continued prosperity!