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Don Tepper's news, updates and sometimes eclectic views

By Don Tepper | Agent in Fairfax, VA

How You Can Find and Buy a Lease-Option/Rent-to-Own Property

How Do You Find a Property to Buy Using a Lease-Option?

If you want to find a property to lease-option, there are dozens of ways. Some require a bit more creativity and ingenuity than others. Nevertheless, even in hot markets--in a seller's market--”there are always lease-option opportunities. And in cooler markets--in a buyer's market--”finding a property is downright easy. We've divided these techniques into ones in which a Realtor is necessary or highly helpful, and other techniques that anyone can do, with or without a Realtor.

Multiple Listing Service

MLS: Lease-Options

If you're working with a Realtor--or decide that's the route you want to go--then your first step is to ask your agent to search the multiple listing service for properties available as lease-options. In down markets, there will be some, though probably not a huge number. In stronger markets, there will be few if any.

MLS: Other Delayed Purchases
Be sure your agent also searches using other terms that describe similar structures. These terms include "lease-purchase," "rent-to-own," "rent-to-buy," "land contract," and "contract for deed." In each case, the owner is signaling that he or she wants to sell, but is willing to wait for the sale occurs. Some of these techniques, and some of these terms, are more often used in certain areas of the country than others. So search for them all.

MLS: Owner Financing
Search for properties on which the owner is willing to hold financing. This means the owner is willing to act as the bank. He doesn't need all the money at closing. He's willing to take payments over time while the tenant is living in the home. And many owners don't have the lending criteria as strict or inflexible as the big banks.

But don't stop there. Have your agent look for other properties in the MLS that are lease-option possibilities. Remember: A lease-option couples a lease with an option to purchase. So your agent should be looking for owners who are trying to rent their properties but are open to selling, or for owners who are trying to sell, but are open to renting.

MLS: Properties for Rent and for Sale
The first step is to find those properties in the MLS listed both for rent and for sale. Even if they're not listed as "lease-options," these are properties that the owners are willing to lease and to sell. All you're asking is that they lease now and sell later.

MLS: Expired Listings for Rent
The next step is to find those properties in the MLS that were listed for sale, but those listings either expired or withdrawn, and are now listed as for rent. These are properties that the owners really would like to sell. But they weren't able to, so they're willing to rent. Again, you're offering a solution to their problem. You're willing to rent now, and may be willing to buy later.

MLS: Expired Rentals Now for Sale
Along the same lines, look for properties that first were listed as rentals, but now are listed for sale. There probably will be fewer of these than those first for sale, now for rent, but it never hurts to look. These, too, are properties that the owner is both willing to rent and to sell.

Thus far, we've identified properties that we know the owners have been willing to both rent and sell. Now we'll move on to owners who might be willing to both rent and to sell.

MLS: Vacant Houses for Sale
Start with owners who are trying to sell, and whose house is vacant. These owners may have bought a new home, but haven't yet sold the old one. They're paying two mortgages--usually an uncomfortable situation. You can help out by providing a quick revenue stream--your rent payments--while offering the possibility of a sale in the future. Have your agent refine the search still further by initially targeting the properties that have been on the market the longest (longest days on market).

MLS: Rentals
You'll find more prospects among owners who are renting out their homes. It may be their former primary residence, and they've moved on to a new home. Or it may be a property they've held as an investment property for awhile. It's important to remember that many owners are "reluctant landlords." It wasn't their original intent to rent out their property. They don't particularly enjoy the whole rental process, and they don't like the hassle of dealing with tenants. But somehow they've become landlords and they're trying to make the best of it.

For these owners, the solution you're offering is the immediate gratification of a rental, and the longer term possibility of a sale. It may help if the property is vacant, but even reluctant landlords whose tenants have given proper notice, and haven't moved out, may be eager to end their landlording hassles.

Those are a few ways of finding lease-options on the multiple listing service. And yet, believe it or not, there are usually many more lease-option opportunities outside of the MLS than on it.
As you've already seen--and as we've already said--many lease-option properties won't be advertised that way. You (or your agent) have to make it happen. You may have to "educate" an owner that the best solution to his dilemma is a lease-option.

But we're nowhere near done. If you're not able to find a real estate agent to help you find listed properties that can be lease-optioned, if you can't find the right home using the techniques above--or if you'd simply like to do it yourself--here are some additional techniques that don't involve the MLS at all.

Non-Multiple Listing Service Sources

Non-MLS Rentals

Many rental properties--single-family homes, townhouses, and condos--are rented out directly by the property's owner. Remember, as we pointed out above, that many owners are "reluctant landlords." All the points made above apply to non-listed rentals. In addition, these owners are facing the hassle of dealing with calls from many "tire kickers" and less-than-serious callers. So, many get frustrated pretty quickly.

And the person seeking a lease-option has another advantage: The ability to speak directly to the owner. Now, technically, even if a property is listed with an agent, you can speak directly to the owner. But the owner has decided to use a real estate agent, in part, to avoid all that hassle. It's poor form, and usually not a good idea, to try negotiating directly with a seller when that seller is represented by a real estate agent. In the case of non-listed rentals, there is no such buffer. You can call and, in most cases, speak directly with the owner.

There can be another advantage, too: Not having to deal with a real estate agent who doesn't understand lease-options, doesn't "believe in them," or thinks that he or she is protecting the owners' interest by not accurately presenting your offer to the owners.

You can find these properties in the classified ad sections of newspapers. You can also find them on online services such as Craigslist. And you can find them by looking at bulletin boards at your local supermarket or other locations. And if you can't find enough by looking, then place your own ads in the newspaper, on Craigslist, and on bulletin boards.

Here are some clues to properties that might work out as lease-options.

For Sale by Owner (FSBOs) Properties
These are properties that the owners are trying to sell themselves. People often try to sell properties themselves for two reasons: In a seller's market--when there's more demand than supply--FSBOs figure that the house will pretty much sell regardless of who the agent is, how much marketing is used, or even the price of the house. So why, FSBOs wonder, should they pay an agent 4%, 5%, 6%, or even more when all it'll take is a "For Sale" sign. In a seller's market, it's very difficult to find lease-option properties, especially among FSBOs.

The picture changes sharply in a buyer's market--when there's more supply than demand. In a slow market, some sellers think they can't afford to pay an agent's commission. They think that they'll end up with more money in their pockets if they sell the home themselves. They're often wrong, but that's their strategy.

One other thing to keep in mind about FSBOs: The asking price of their house is far more likely to be too high than too low, or even properly priced. In part, they don't have access to all the tools a real estate agent does. In part, they're emotionally attached to their homes.

Sometimes, they had an appraisal on their property for one purpose, such as a refinance or home equity line of credit (in which cases, the appraisals tend to be on the high side), and they think that the appraisal was an accurate reflection of the value upon resale. It isn't. And sometimes they've used one of the many online services, such as Zillow, to price their homes. Those services sometimes are reasonably accurate. Often, they're not.

So, in any market, hot or cold, FSBOs are likely to be overpriced. And in a slow market, that means most will sit there and just not sell. That's why you, the buyer, should have a real estate agent on your "Dream Team" even if you're planning on finding the property yourself. Your agent can quickly tell you whether the price being asked by the seller is reasonable.

When dealing with a FSBO, a lease-option buyer can offer closer to what the FSBO actually wants. The catch, of course, is that the sale will occur a year or more into the future, not today. If the FSBO needs all of his equity out of the property, this strategy won't work. But if the FSBO can wait a year or two, there are golden opportunities for the lease-option buyer. The tenant-buyer explains to the FSBO that he can pay what the FSBO is asking (or close to what the FSBO is asking). Just not right away. It's the same basic strategy that's used above, for listed homes for sale. But now you can make your case directly to the seller.

Owner-Advertised Lease-Options
Sometimes owners will advertise lease-options. They understand the benefits of lease options to them—immediate cash flow, often at higher-than-market rent, plus a good opportunity to sell their homes—and decide to try it themselves. You can find these anywhere owners advertise—local newspapers, bulletin boards, Craigslist, and so on. In structured formats, such as newspapers and Craigslist, look under both properties for rent and properties for sale.

Investors
Some investors put together lease-options, then market the lease-options to tenant-buyer with a markup. These are called "sandwich lease-options" because the structure resembles a sandwich: An owner on one side (one slice of bread in the "sandwich") lease-optioning the property to an investor; the investor in the middle (the meat in the sandwich), and the tenant-buyer on the other side (the other slice of bread in the "sandwich").
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Excerpted from How You Can Buy a Home With Poor or No Credit Using Lease Options. To order, just click here. If you're interested in buying or selling using a lease option, e-mail Don@Solutions3DHome.com or go to http://www.Solutions3DHome.com

Comments

By Sheila Sands,  Thu Mar 18 2010, 11:27
Thank you for all help help and advice. I think this option is for me.
By Don Tepper,  Thu Mar 18 2010, 11:41
I'm glad you found this--and my advice--helpful. If you--or anyone else reading this--has any questions on lease-options, just post them here and I'll do my best to answer.
By Mary,  Wed Mar 24 2010, 21:13
thank you but do u have listhings. rent to own?
By Don Tepper,  Fri Apr 2 2010, 16:05
I have some, and I work with quite a few investors who also have rent-to-own properties. Just shoot me an e-mail telling me where you are and what you're looking for, and I'll try to help.
By Pat and Steve Pribisko,  Fri Apr 2 2010, 19:15
Congrats on a well written Blog that provides usful info for potential Buyers.
By Kattskorner22,  Sat Apr 24 2010, 13:39
Question: Can one search the MLS system without a realtor? If so, which websites can one go to and search for lease option properties. Are there other websites that one can use (other than Craigslist and FSBO) to find for sale by owner properties?
By Don Tepper,  Sun Apr 25 2010, 08:37
Regarding searching the MLS without a Realtor: Sort of. You can go to http://www.Realtor.com That's run by the National Association of Realtors and you can access anything on the MLS there. Or many local Realtors will have search functions tied in to their local MLS system. Sometimes you have to "register," but other times you don't. The drawback to all of that is that you're only seeing a subset of information. For example, while you can see the "Public Comments" section, you can't see a similar section meant only for Realtors. (Sometimes there will be a comment like: "Seller financing possible" or "Will consider L/O" in the Realtor comments but not the public comments.) Also, with most systems, you can't see intermediate price reductions. And there are a lot of sophisticated search options in many MLS systems that you don't have as a public user. For example, I can search in a radius around a central location. But certainly give http://www.Realtor.com a try.

As for other web sites for FSBO properties: There are a lot. I don't primarily focus on FSBOs, so I don't have a great list of them. I do now that there are a couple of ones used by the military. Here's a Google search that will bring up a lot of them: http://www.google.com/search?rlz=1C1SKPC_enUS336US339&sourceid=chrome&ie=UTF-8&q=military+for+sale+by+owner Or just search for "military for sale by owner."

Hope that helps.
By Kattskorner22,  Sun Apr 25 2010, 13:16
Thank you Don....you have been most helpful.
By Ife Garey,  Fri May 7 2010, 08:50
Thank you soooo very much for this information. You have definitely assisted in my journey to home ownership!! Thank you!
By Don Tepper,  Fri May 7 2010, 09:01
Glad to be of help. If you have any other questions along the way, just post them and I'll do my best to answer.
By Yeni,  Tue Jul 27 2010, 19:25
ok my question is if i can take this program in chicago il my email is yenivalencia@live.com
thank you and i hope your answer
By Don Tepper,  Wed Jul 28 2010, 04:08
Hi, Yeni:

Yes. Lease-options/rent-to-owns are done in Chicago. The only place where they're very difficult to do is in Texas, because of certain laws in Texas. There, any such transactions have to be structured differently. But there's no problem setting up a lease-option in Chicago.
By Lilirose,  Wed Aug 4 2010, 11:34
Hi Don, I just found your blog, I am so happy! I am a single mom in Brooklyn , NY and I found a great co-op apt. that the owner has been renting out and it is available in a few weeks. She would like to sell it eventually and has an addendum to the one year sublet contract that allows her to show the apt. for sale after the tenant lives there for nine months. I am nervous to have to move at that point (if I take it , of course). Her asking price is too high for me right now and her broker told me she is not flexible, so I thought I would ask about the "rent to buy " option.
He said we will meet with her tomorrow , that I should put together what I want for an agreement. Here is my question for you... from what I have been reading, these agreements are approximately 36 months in length. I believe she can only sublet one year at a time (co-op rules?) I can check on that... How can she and I make an agreement in that case? I want to ask her if my total rent can go towards the purchase price..... any thoughts? I really appreciate it. Lili Feldman Brooklyn, nY
By Don Tepper,  Fri Aug 6 2010, 08:09
Hi:

Thanks for your comments. Note to others: Lilirose and I spoke on the phone shortly after her posting, so let me address a few points for anyone else who might be reading this blog. First, this is a near perfect situation of how a lease-option can work. You have a situation where the owner wants to rent now, but is ultimately interested in selling. And you have a situation where the tenant-buyer would like to buy, but isn't able to at the moment.

And Lilirose is proceeding in exactly the right direction. The asking price is too high and the broker says the owner isn't flexible on price. But remember: You negotiate on price AND TERMS. A real estate investor, for instance, will pay a high price if the terms are favorable. If the terms aren't favorable, then the low price prevails. Here (unless further negotiations can bring down the price) you would negotiate on terms. And Lilirose is heading in the right direction--by asking whether her total rent can go toward the purchase price. Now, frankly, that'd be unusual. But there's nothing wrong in asking. But the more of the rent that can go toward the purchase price--60%, 40%, 30%--the better. There's no "standard," but in general a 20%-25% credit is considered good. If Lilirose can pull the price down with a generous rent credit, that's great.

Lilirose raises the question about the length of a lease-option. In her case, she believes that the owner is only permitted to rent for a year at a time. That's OK. I'm not a lawyer, so this isn't legal advice. But a lawyer would probably then suggest a 1-year lease with the right to renew for additional years (one year at a time). So the lease itself conforms to the 1-year requirement. In addition, the option to purchase can be for more than one year. And from the tenant-buyer's standpoint, the longer the better. We're talking 3, 4, 5 or more years. Ask for more, then negotiate a shorter time period if necessary.

I also advised Lilirose to check with a local Realtor to determine the current market value of the coop. The owner's asking price--though as a practical matter high for Lilirose--might actually be a good deal. Or it could be priced too high. From the tenant-buyer's standpoint, while it's desirable to get the lowest price possible, it's OK if you start out around market price. Remember: Those rent credits will build up. And, while you can't depend on it, property values may increase as well. So, for instance, a full market price of $300,000 today may be a good value 3 years from now . . . and even more so if rent credits reduce the effective price to $280,000 or so.
By Theparkers,  Sat Sep 25 2010, 19:30
Hello Don, my husband and i are very interested in the lease to own option. We live in Shreveport,LA. Can you help us find property in this area or at least point us in the right direction. thank you. Mr.&Mrs. Parker
By Lisa,  Tue Oct 19 2010, 20:54
Hi Don, I am interested in a rent to own home in Temecula California. Can you help me find homes or direct me to legitimate companies that offers listing in Temecula area?
By Bri,  Wed Oct 20 2010, 20:55
Hi Don, We are interested in a rent to own townhome in Naperville, IL. Where we should start? Where we can see the listings? Do you know if bank owned properties can be RTO or short sales?
By Big Dummy,  Sat Oct 23 2010, 18:36
Hi Don, I read with great interest your lease to buy. I was aware of deals such as this but have no idea where to begin. I was wondering what you could for me as an agent and also what amount you would charge. I have a property which I am very interested to rent/buy that i saw at an open house. i would appreciate a call so that we could discuss the situation and your terms. Please call tom roach at XXX XXX XXXX this is central nassau county in New York 11596, thank you.
By Zmbrennan,  Thu Nov 11 2010, 08:55
Thanks for this informative blog which is useful for both the buyers and the sellers and the associates working with them to grasp the alternative solutions in the increasing of the credit restrictions on many markets going forward.
By Charlotte Turner,  Wed Dec 8 2010, 12:24
Hello Don, Would you know of a real estate agent in western, nc that works alot with lease with options? I am so interested in buying a home in these areas: Murphy, Hayesville & Waynesville. Please reply as soon as you can. Thank you. Charlotte
By Spankyjo54,  Mon Jan 10 2011, 16:35
My husband and I have had nothing but grief from our Rental Mang. Co. They are nit picking us at every turn and though we love the house we are living in, the rent is terribly high when living on disability, but we have to have the kind of house we are in now because we care for our disabled son. Our landlord however will not let us put in any type of handicapped equipment, such as just bars to get into and out of the shower or bath. So we are stuck for now.
I heard about the Rent to own option from an e-mail that was sent to me via Spam sort of. I contacted the guy and he seems very interested in working with us but I have written him with our list of homes we want to look at and all I get is what seems like computer generated e-mails because he never answers our questions or calls us like he stated he would do.
What do you think, how do we find out if he is legit or a con. Thanks, Arlene Barton, Phoenix, AZ.
By Amatrau,  Sun Jan 23 2011, 18:57
I live in TX, and you said above that lease options were more difficult. How so? What do we need to do differently?
By Dp2,  Fri Feb 25 2011, 10:14
Great post, Don!

Lease-options can only be structured for up to 6 months in TX. Some laws were passed a few years ago to stop some shady practices: a few bad apples (investors) repeatedly structured their lease-options in a manner to take advantage of their tenant/buyers. Basically, they structured the terms so that tenant/buyers hardly ever could exercise their options. Anyway, it's better to do some type of installment sale there.
By Betty Smith Sadler,  Sun Mar 6 2011, 09:37
Thank you, Don, for your very informative blog. I found it helpful in helping me to make an informed decision.
By Laura,  Sat Jul 16 2011, 09:13
Thanks Don....very helpful information.
By Don Tepper,  Sat Jul 16 2011, 13:50
dp2:

Excellent point about Texas. I try to point that out in the Q&A area, especially, any time I see a question coming from Texas.

Betty, Laura:

Thanks. I hope it helps.
By Nezza801,  Sun Jul 17 2011, 12:34
Hello, I really like this blog. I have been looking for awhile now for lease purchase homes. It seems like all these sites want you to sign up and they are all related? Scam? I think so. How can I find lease purchase homes in GA and do they do that? Thanks in Advance and Again love the blog!
By Don Tepper,  Mon Jul 18 2011, 08:20
Nezza801:

Thanks.

To answer your questions: No, not all the lease-purchase sites are scams. And they're not all related. (Though I'm sure some are. But I know some of the people behind the different sites, and they're legit.) And you've given me an idea for a new blog--one to help separate the scams from the legitimate sites and offers.

One thing to be careful about is if any site asks for any money up front. Understand: In a lease-option it's almost a certainty that you'll need to put some money up as the option fee. But that comes at the time you actually commit to the lease-option. (And even that's negotiable. I've done lease-options without putting up any upfront option fee.) So: No money just to access a list of available properties. Another tip-off: If the site (or investor) won't allow you to have the documents reviewed by an attorney or other expert of your choice. That's something that you really should do, and you shouldn't be discouraged or prevented from doing so.

And here's a red flag--doesn't mean it's a scam but means it's not good for you: A very short (3 month, 6 month, 9 month lease-option period). Reason: In most cases, it'll take that long or longer to clean up your credit, accumulate any appreciable rent credits, save for a down payment, etc. A very short lease-option period is going to have a much higher rate of failure. Another red flag: No provision in the option to say what happens if prices decline or the house doesn't appraise for the option price. Again, not a scam necessarily. But in today's market you need that protection. And there are 3 or 4 different ways to address that issue: (1) extend the option, (2) reduce the purchase price to the appraisal price, (3) cancel the option but refund the option fee to the tenant-buyer, (4) some combination of 1-3, or (5) a few other techniques. That's the sort of thing a lawyer would notice when reviewing the option, which is why it's important that the documents be reviewed--not just by a lawyer, but by a lawyer (or sometimes someone else) who really understands lease-options.

Bonus tip: Ask how many of the lease-options actually go to closing and are purchased. If the person says: 100%, it's a scam. Not even 100% of all traditional real estate contracts close. It's estimated that perhaps 50%-70% of lease-options close. And sometimes there are very good reasons for them not closing. Someone who claims that they all close (unless they've only done 3 or 4 and gotten lucky with them all closing) isn't being honest with you.

Hope that helps.
By Shameka Shoultz,  Tue Aug 16 2011, 19:07
Hello, This was absolutely the most helpful blog Ive come across so far. My husband and I have been trying to find a Rent to Own home for over a year but we really have no idea where to start. It seems as though all the websites that we've encountered have been scams. We live in Southern NJ in Burlington County.

Do you know of any realtors or any websites that can lead us in the right direction. We both have steady incomes but less than favorable credit due to a ton of student loan debt. We have 2 small children and are stuck living in an apt paying almost $1000. We would mich rather pay a little more to work on purchasing a home one day. Please let me know if you know of anyone who can help us.
By Kimber529,  Wed Dec 21 2011, 15:49
I have just came across this link and was wondering if you could tell me of how I can go about finding a lease to own in Michigan. I have been doing searches online and every link I find wants me to sign up and give them a credit card or check my credit before I can get any information. This makes me nervous. I have been renting a house for 2 years and then found out that the landlord had let the house go into forclosure and then I found out that Fannie Mae bought out the mortgage and they alow us to continue renting the house which I decided to do. Well they sent an inspector in to inspect the property then they sent a company in to get a cost to repair the property. Well 2 days ago the real estate company handling the transaction for fannie mae called me and informed me that Fannie Mae wanted to make me an offer of 2000.00 to move out by Jan 2nd,2012. I told them trying to find another house for rent in my price range for me my son and my 10 year old golden retriever , then pack up my whole house and move in 12 days during christmas and new years is going to be impossible. I am not sure where this leaves me and I am very stressed about all of this process. It seems like the price of rental propert is went up tremendously since the forclosure rate has gone up. I would appreciate if you could give me some advice on a lease to own company in michigan my email is Kimber529@yahoo.com
By Don Tepper,  Thu Dec 22 2011, 09:04
Shameka and Kimber529:

I probably ought to write another blog on how to avoid lease-option scams. As I've pointed out in past Trulia posts, there's no reason to pay up-front for information. I know a few investors who take a refundable deposit. That's to separate the serious prospects from the not-so-serious ones. Usually, that'll work like: "Either we find you a property that fits your needs that you're happy with within 60 (or 90, or whatever) days, or we'll refund this deposit. If we do find you one, this deposit will be credited to your purchase price." That can work, but it's risky for the tenant-buyer. Suppose, for instance, that the investor says: "This meets all the criteria you presented" but you don't like the place? Also, you're trusting that the investor won't just go out, spend your deposit, and then not have it available in case of a refund. So: Be very careful of those, but don't rule them out entirely.

But don't simply pay up-front for information, or access to a web site, or for a list of potential properties. Insider's secret: A properly-constructed lease-option makes a lot of money for the investor. At the same time, it's a win-win for the tenant-buyer and the seller. If an investor really plans to make $5,000-$20,000 or more on a lease-option, then what's the point of charging $19,95, or $99, or $149 for "information" or "access."

But there is a very legitimate reason for an investor (or a seller) to request a credit check. The ultimate goal is for the tenant-buyer to purchase the property. So the investor or seller needs to determine whether the tenant-buyer has enough income to qualify, and whether the TB can raise his/her credit to where it needs to be in order to exercise the option. Example: A property is offered as a 2-year lease-option for $150,000, with monthly rent of $1,000. Obviously, the investor wants to make sure you can pay the $1,000 a month. But the investor also wants to make sure that in 2 years you will be in a position to buy the property for $150,000. If you have a credit score of 590 and monthly income of $2,400, that shouldn't be a problem. But if you have a credit score of 440, a recent foreclosure, and monthly income of $1,800, that's a much steeper hill to climb.

Many lease-options are advertised as "No Bank Qualifying." And that's true, up-front. But it doesn't mean that there are NO qualification criteria. Or "Poor Credit OK." Again, that's true. But you have to be able to strengthen that credit over the period of the lease.

As for a quick move-out date: Try negotiating that. I suspect that your city or county also has a consumer protection office and/or services for tenants. Contact them to find out what your rights are. That's really about all you can do.

As for rents having gone up sharply since the foreclosure rate has gone up: Yes. That's simple supply-demand economics. Basically, you have about the same number of people who need housing. (OK--some can move in with parents or children or friends. But most still need their own place to live.) However, the ability to buy has declined--due to people having gone through foreclosures and short sales. So: Same number of people need housing but fewer can buy. That results in more of those people looking to rent; that's their only option. And with supply-demand economics, more people looking to rent the same number of houses means that rents are going to go up. More demand; less supply.

Kimber529: In Michigan, land contracts are also very popular. They're different than lease-options, but can accomplish the same thing. So be alert to folks offering land contracts. One suggestion: There's a Realtor in Michigan named Wendy Patton who specializes in lease-options and land contracts. (She also has lots of products she sells to investors; I've bought one of her programs.) I don't know if she has a web site for buyers or sellers. But you can reach her through her site that promotes her products: http://www.wendypatton.com Understand: I'm not endorsing her. But since you're both in Michigan, that'd be one place to start.

You can also find real estate investors through real estate investment clubs. Go to http://www.creonline.com Then look for real estate investment clubs in Michigan. The best way to interact with them is actually to attend a meeting. But since you've got a very short deadline, start with phoning (or e-mailing) any in your area.

Hope that helps.
By Voices Member,  Tue Dec 27 2011, 06:32
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By Amysnellings,  Fri Jul 6 2012, 13:56
How do I find these lease to own homes, I haven't been able to find any in my area.
By Coffin08,  Tue Jul 31 2012, 18:08
Hi I live in Tempe Arizona and I would like to know if you know of any Lease to own or rent to own options. Thanks. my email is candicecoffin@rocketmail.com
By Vmorris21,  Thu Aug 9 2012, 06:11
SIR
I see you are from the VA area my family and I are going to be PCSing to FT Lee VA I am trying to find a rent to own place for the time being can you point me in the right direction. Can you email me at krzbagdmaz@gmail.com thanks
By Caryn,  Tue Aug 28 2012, 16:26
Hi! Could you give my husband and I some advice on where to find a descent rent to own home in Central MA. We just had a baby 10 months ago and we want her to have a backyard and stuff to play however we don't have the deposit money to buy the home outright and I don't have good credit right now my husband has descent credit though. Thanks in advance.

Caryn e-mail - cmd121171@aol.com
By Koolio,  Fri Sep 28 2012, 18:20
Hi. I'm looking for a place in Tempe, AZ. Do you know of any good rent-to-own sites for this area?
By Akenerson84,  Sat Oct 20 2012, 12:50
This blog was very helpful.

My husband and just recently got married and are looking for a rent to own property in the Chicago area, more on the Northside of the city, can you help with directing me where to find these options. I even think an lease option may help
By cwilson,  Sun Oct 21 2012, 12:39
Do you know of any agents or investors in the Belleville, Canton MI area that offer land contracts or rent to own
By bERNETA_MOORE,  Fri Nov 16 2012, 17:59
Do you know of any agents or investors in the St. Clair or Sterling Hts, MI area that offer land contracts or rent to own .
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By Christy,  Thu Jan 10 2013, 17:45
Hello, I'm hoping you can help point me in the right direction for finding lease-to-own properties in the south San Jose, CA to Gilroy, CA location. Do you have or know anyone in this area? Thank you!
By Rivas541@gmail.com,  Wed Jan 23 2013, 17:11
The most in depth and helpful information I have encountered on the subject. Rent to own is our only option to own a home in the near future without moving several times in the next few years. We found a beautiful property in the Maplewood neighborhood in Rochester New York and even though we can afford the home payment plus taxes interest and insurance, our bad credit completely denies us any chance to get approved for a home at any price range. Renting is our only choice along with the long road to repair the credit. But RTO seems viable and if we could only find a knowledgeable real estate agent to help us. Buy what incentive does a real estate agent have to put together an rto? Do you have any suggestions to a realtor in this area? Thanks!
By Brooklink,  Thu Jan 31 2013, 00:58
Can I do a rent to own on a reo
By judymullis,  Mon Feb 4 2013, 19:00
Hello,

My husband and I own a home in Acworth, GA (about 25 minutes outside of Atlanta). We are trying to list our home as a rent to own but have had a difficult time finding the most reliable way to do so. I know there are many people out there who are not in a position to buy, but would like to the option to rent until they can buy. Can you give me any advice as to how to list our home? Please don't hesitate to email me directly. jwm24587@aol.com Thank you, in advance, for your help!
By toyo.skyline,  Thu May 2 2013, 21:13
I'm a single mom, i went bankrupt 3 years ago chapter 7, i have a poor credit score and interested in the rent to own, i'm in California. Is it possible that i qualify for a program like this one? I was trying to get an apartment for rent and found out they do a credit checks and i got denied for that. Thanks in advance for the help.
By Don Tepper,  Sun Aug 25 2013, 16:31
A few additional comments/responses:

@toyo.skyline: Yes, you might "qualify for a program like this." But there isn't just one program, or one set of standards. Nearly every owner or every investor has his/her own set of standards. The bankruptcy 3 years ago wouldn't be a problem. But an owner would wonder why you still have a poor credit score 3 years later. You don't need a good credit score to get into a lease-option BUT you do need the ability to improve your score during the course of the lease-option (ideally 2-5 years) so that you can purchase the property during or at the end of the option period.

@judymullis: There are a number of ways to list your home as a rent-to-own. Just "reverse engineer" my advice on finding them, so that people can find you. Probably the best way is to have your house listed on the MLS both as "For Sale" and "For Rent." Have your Realtor include something like the following in the "Comments" section: "Owner will also consider a lease-option or owner financing."

@Brooklink: No, you can't do a lease-option on an REO. Banks don't want to be in the position of a landlord. If they've got an REO, they want to get it off their books. They want to sell it. It might be possible to find an investor to purchase the REO and then have the investor lease-option it to you. But banks won't do it directly.

@Rivas541: Your question is: What incentive does a Realtor have to assist in a lease-option? That's one of the drawbacks to lease-options, though there are ways to deal with it. First, with a lease involved, both agents will receive commissions from the leasing transaction. That's not much; in many areas (though it's fully negotiable) the commission might be the equivalent of one month's rent. Still, there are agents who do just fine focusing on rentals. But the real key--and credit for this strategy goes to a Michigan Realtor named Wendy Patton--is to pay some of the commission up front when the lease-option is signed. Let's say the property is worth (and the option is for) $100,000. In that case, the full commission might be (again fully negotiable) around $6,000. And let's say the owner of the property is asking for an up-front option fee of $3,000. That cash can be used to, essentially, pre-pay a portion of the commission. It probably won't be the full commission, but it's possible to generate 30%-60% of the commission from the option fee. That should be enough to interest the agents. The rest would be paid at closing.
By lexyjay59,  Sat Aug 31 2013, 18:10
Where can I browse free listings of rent/lease to own options in S.C.???
By akilahy2k,  Tue Sep 10 2013, 22:54
Where can I browse free lease to purchase or rent to own homes in Greensboro NC?
By Melba Diaz,  Sun Sep 15 2013, 14:21
Great info, all at once.. thanks so much. I am in the process of doing seller financing or Lease to purchase on one of my properties.. thanks,
By Narrine Montague,  Fri Sep 20 2013, 06:25
I AM INTERESTING IN THE LTO HOME IN NJ CAN YOU HELP ME WITH GETTING STARTED.
By Jamila,  Sun Oct 20 2013, 20:19
hi iam a disabel mom of two and i dont have good credit or a lot of money to put down but i would like to rent to own instad of just renting were can i go to for seattle airea
By jb1914,  Tue Nov 5 2013, 17:23
Don,
Do you know a good Realtor in Texas, or a good lawyer to look over rent to own contracts in Texas?
By Don Tepper,  Sun Dec 1 2013, 10:12
JB1914: Texas has some very strict laws that really limit the ability to to lease-options or rent-to-owns in Texas. I don't know of a specific Realtor or lawyer. However, contact your nearest real estate investment club. Go to http://www.creonline.com You can search by state. Most of a club's members will be investors. However, some will be Realtors and you may find a lawyer or two. Whoever's a member of a real estate investment club is likely to be creative and be able to recommend ways to accomplish your goal.

Hope that helps.
By rosariobechelian,  Wed Jan 1 2014, 09:17
I have been looking for a single home rent to own in Orange California for a long time, my credit is bad but I really need to find a place for me and my 14 year old son, I am divorcing and need my own place. Can you redirect me on how to apply with out paying large amounts of money. My dream is to get a nice home with three bedrooms and two bathrooms.
By Senamal13,  Wed Jan 8 2014, 16:37
I'm a single mom I'm looking rent to own home. For me and my son . I'm living in Staten Island ny. If u can help me I really appreciate. If you have any openings please let me know. And if I want to contact you how can I contact?
This blog is so good people like us.
By Joe n Kim,  Wed Jul 30 2014, 21:13
I have to say, after reading what Don has offered here on the blog, Im feel so blessed to have come upon him and his words, he gives people who have been victims to the mort crisis, a hopeful outlook. We too are looking at a home, an estate sale with an accepted offer of $135,000, the value of the home is appx $189,000 or so per comps within last yr. Our problem is: bk 7 two years ago, and a credit score of 639, one point from the required score...We are seeking an investor who will purchase the home for us, then us buy it back within 12 months, of course we would make offer with investor for helping us at around $145,000/$150,000 to buy it back from investor., Only thing have to find investor willing. Have inspection completed, title Alta comm. done/paid for. Just need investor ; licking county, Ohio area. Any assistance or advice from anyone would be so helpful. Time is of the essence; I have until Aug. 21st to purchase the home. Thanks ;) Keeping the faith. email: kimtail@columbus.rr.com

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