First Land Contract Deal!!

Right on Shaun!! Great job!! That is so exciting! Now you have some serious motivation to find yourself a great deal on another place!! Keep us updated on this!

Tracey

Do you mean you did an Option to Buy, or a Land Trust? It sounds more like an Option to Buy.
Ruby

Option to buy is where a person is renting a place off of you for say 2 years then at the end of 2 years they have the option to buy the property. They usually just give first months rent and security deposit and sometimes instead of the rent usually being 500/mon you charge them 600/mon and 100/mon you set aside to help them with there down payment at the end...

Land contract is where they are going to buy the property... They give a downpayment of at least 3%. You set a purchase price with 30 year amortization and an interest rate and there rent goes toward their mortgage... EX: purchase price of my house is 70,000 she gave 3500 down. The terms are going to be 66500 30 year amortization at 8.5%... with taxes, insurance, pmi, and the rent i am charging her for appliances her payment is 675/mon for 24 months. At the end of 24 months she will have a balance of around 65,450 that she will have to finance...

Hope this helps!!

tennball81 what is the benefit in the land contract. I looked up both,
It almost seems the LC offers you to get out of your responsibility with
your loan still assuring you keep right to it.

Randy
2birds--------1stone!

I like Land contract b/c you get more money up front which you can use to fund other deals! And it helps buyers that don't have good credit. They can do a land contract with you and at the end of the contract you can show the mortgage broker that they have paid on time every month which can help them get approved.... Also with land contract you don't have to be a land lord. The tenant/buyer is responsible for all maintance (except major things like if the furncace goes out). And it is stated in the contract that they are obligated to buy it... So if you hate being a land lord and like all the money upfront Land Contract is for you...

On the other hand some people like to be a landlord and like to collect rent every month... So if this is you then Lease Option is for you!! You don't get as much money upfront and they do NOT have to buy the property... You are responsible for all maint and repairs!!! So hope you like those 3am phone calls saying the toilet is clogged!! lol

Thanks
Shaun

Shaun basically you are cosigning the deal,Giving your party enough
time to get there own credit! I did think in the mean time you could
show to a HML (conven)Your debt ratio is smaller and in other words
but another property!

Good post Shaun...And if i am wrong about my theory! You know what 2 do.

Randy

Randy you got it right!!

Thank you for that randdee813. By the way congratulations on your first Land contract!!! Job well done and good good luck in finding a new place.

Now, how is a Land contract different from a regular sale/purchase and how do you set it up?

The difference is that on a regular sale/purchase you don't have to collect rent. On a land contract you are collecting the payment from the buyer for 2 years and you are still paying the bank.

P.S. Finding a new place to live in suce short notice is not easy!! I haven't been able to find a place yet... I have until June 1st though... I plan on moving to Florida here real soon (from Ohio) but I can't just yet... So hopefully I can maybe find a place with real cheap rent for 3-6 months...

Congrats and good job on the land contract!! Way to think on your feet! Now get yourself an awesome FL deal. You might be getting there just in time to start playing THAT market!

Again, congratulations!

Rina

Thanks a lot Rina!! I know good things are coming and they are coming very soon!!

I also live in Ohio and a lease option sounds alot like your land contract, you can get 3%-5% down with 2 years to exercise their option . However you write up your lease option , If you want $600 per month, you can charge $700 a month and give them $100 credit for each of the 24 month and if they don't exercise their option to purchase, the downpayment and the $700 payment is non-refundable. I also heard that if their in a land contract and they don't pay , you can't kick them out you have to foreclose on them which is a long process in Ohio. This is what I've been told by other R.E.investors so good luck and be careful.

I've been interested in R.E. investing for along time and have spent a lot of money trying learn as much as I can and I bought Deans books . Between Deans books and this website I have learn more in the last 6 months than all the other courses I've taken . This group on this website are the best .

You have come a long way pilgrim ! I am proud of your progress. Good luck in the land of Orange Juice!!....Jan

Thanks Jan!!! I'm still hoping one day You and I will do a deal together!! We were close once before!! I bet it will happen sometime in the future!

Just show me the deal. We will do one for the heck of it. Good luck in all that you do, I will be watching your posts....Jan

You are correct about the land contract in Ohio. A land contract is more geared to protect the Buyer. Should the buyer default you would have to go through the eviction process which can be long & difficult. A lease/option is geared to protect the seller. Meaning the seller has more rights and would have a much easier time regaining the property should the buyer default. Both ways are fine. The higher the deposit is the more likely they are to execute the deal. Congrats on your land contract. I wish you the best of luck in the future.

What a struggle just to close on a home I bought thru HUD. After 2 contract extensions and 3 canceled closing dates, it appears we will finally close on 4/27. It will be all worth it after I sell it to a good family.

Keep going after your dream,
Bruce

"Only those willing to risk going too far can find out how far they can go."