Home Buying in 92131>Question Details

Brian Curry, Real Estate Pro in San Diego, CA

Has anyone heard of first step financial online and are they a scam about doing rent to own properties?

Asked by Brian Curry, San Diego, CA Wed Sep 28, 2011

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Hi Brian,

Go online and search "lease options." You'll get a lot of information for investors, because that's who they mostly benefit. As an investor myself, I sat through many club meetings where investors spoke about how they structured their deals. They're an investment technique. It doesn't really make sense for a buyer, because prices aren't going up yet, so a buyer might lose out two ways. First, they pay higher up front. Second, the investor will try to get the buyer to take the shortest option period possible, banking on the fact that he/she won't be able to exercise the option by the end of it. Many renters can't qualify for a loan, or they wouldn't do it.

If your buyer's set on doing it, it'll only make sense if you can get the longest option period you can, like five years in this market (good luck talking an investor into that), AND they know they'll be able to qualify at the end of that period. A typical option period is one or two years.

I'm not sure why you'd need a financial company to do the lease option, since there's no loan. It's only rent in the beginning.

Good luck,
0 votes Thank Flag Link Thu Sep 29, 2011
Transaction online is fine but payments or before paying you need to see them in personal or check the status to avoid scams.
0 votes Thank Flag Link Sun Oct 25, 2015
I went through sun financial online i gave them 200 to give me a list of properties that was rent to own..never got a phone call or email back its been over 2yrs now..do u knw anything i can do?
0 votes Thank Flag Link Sun Oct 25, 2015
I would be very careful with financial companies no one has herd about and would go with an established bank. Maybe your rate is higher but you know what they say.. If its sounds to good to be true its a scam
0 votes Thank Flag Link Sun Feb 10, 2013
Hi Brian -
I am not aware of first step financial but would like to share an experience about another rental scam.
In the past I have had my listings posted by scam rental agencies online and in print. The renters would be told the property owner is out of country and they would have to do a drive by first. If they liked it then they were to submit a deposit to this "fake agency" and the keys and contract would follow later. The rental rates were about half the normal neighborhood rents, so that was attractive. If the prospective renter was smart they called my number on the sign to discover it was a farse.

Jeff Smith | Realtor® | Your Best Choice!
HÔM Sotheby’s International Realty
16909 Avenida De Acacias | Rancho Santa Fe | CA | 92067
858.367.4333 direct | 858.756.1150 office | 858.756.1171 fax
DRE #01056750
0 votes Thank Flag Link Sat Nov 19, 2011
Yes, First Step Financial is a scam. I signed up with them as others have posted, looking for houses to rent. I called a couple of the listings and got peoples voice mails but never got a call back. I ended up renting a house about a week later through a reputable property management agency, and called FSF back to cancel the service. I received an e-mail that day or the following day saying that my subscription to their service was cancelled as I requested and that no further charges would be placed on my card. However, about a week and a half later there was another charge on my account. I called them 4 times, got voice mail only and never got a return call about reversing the fraudulent charge. I also e-mailed them and never got a response from that either. I had to dispute it with my bank, which meant that I had to cancel my debit card and wait for a new one to be issued. The bank is investigating and will likely refund my money because FSF will not be able to support the charge against me. But what a hassle! Over something that was not really useful in the first place.
0 votes Thank Flag Link Fri Nov 18, 2011
They are a giant scam!!! There are many companies like this one all asking for $40-$200. If you want listings of houses that are N.O.D. or R.E.O. than sure maybe sign up with them. But you could just go to foreclosure.com which is cheaper and better. Hell they probably get their listings from their or somewhere similar. They are not going to contact any homeowners for you or take care of anything. They are going to provide you with listings and some documents you can get online for free. No homeowner will want to work with you unless their house is in deep trouble and at that point it is not worth the money to save the home. It'd be easier to buy a house that is not under water. They can lie to you, they will lie to you, and then you have to call them back or do a charge back at your bank. If it's TOO GOOD TO BE TRUE, then IT IS!
0 votes Thank Flag Link Wed Oct 19, 2011
Brian, Cannot speak directly about FSFO; however, I absolutely agree with Cory's comment. I have rarely seen a rent to own or lease purchase transaction come together for the buyers benefit. I have been in the very unfortunate situation of delivering the news to a prosepctive buyer that they could not get financing in time to exercise their option. All to often, the contracts are written to "fail" and the only winner is the seller.

The most common issue is in the amount of "rent" that the seller/buyer will go towards the "down payment". From a financing perspective, only the amount over fair market rent can be credited as a down payment. In other words, if fair market rent is $1000, only funds above that amount would be used in financing calculations. Too many times, the buyer/seller come up with a more agressive plan (say $500, in this example) and the buyer approaches a lender after the fact, thinking they have contributed $500 times number of months and have satisfied their down payment obligations. When, in fact, they have made no down payment and still need to come up with funds for the purchase.

Best advice: Stay away from them all together. Unless, as Cory states, you are an investor looking to take advantage of unsuspecting consumers.
0 votes Thank Flag Link Thu Oct 13, 2011
I just received a call asking about one of our shortsale listings, caller said: I paid $40 to sign up with FirstStepFinancial Online.com, they gave me access to their properties (which includes our listing), FSFO says banks are offering those houses already foreclosed as a rent to own option, FSFO says banks have too many to handle and now they are making them rent to own. FSFO promises to handle the contract with the current owner. I'm calling because I stopped by this house and saw your sign.
Caller was shocked when I told him: the house you called me about is not for rent, is on sale. Caller said: thank you for the info, that sounded tooooooo good to be true.
0 votes Thank Flag Link Wed Oct 12, 2011
A rent to own business model, after the reasons for the housing crash, is suspect at BEST!

Potential buyers: If you cannot afford to purchase a home using a reasonable down payment and financing, you should avoid buying. Period.

That's how we got into this mess in the first place.
0 votes Thank Flag Link Wed Oct 12, 2011
I signed up with them on September 1st 2011. The person that signed me up did not tell me the signup fee was non-refundable even though I asked. I voiced my concerns and questions regarding the list that they provide you of properties in foreclosure. You are supposed to contact the homeowners yourself. He told me that their sales team would help me with the process. I went ahead and signed up because I was looking for an expanded list of potential homes for rent. Once I got the list, I realized that there was nothing available for me and the information was ambiguous and the process would have taken a long time, and further, I did not have the time to find out if it was even legitimate because the process was so cumbersome. I had explained that I needed to move in 3 weeks. I submitted for a refund and have not received it. I have called to get the status on my refund and I get transferred to voicemail and no one returns my calls. Feels like a scam to me!
0 votes Thank Flag Link Tue Oct 11, 2011
I am not familiar with the company. I think you should be cautious and do a full analysis before entering in to a rent to own situation. Generally the reason that a seller would offer such terms is that they cannot sell the property for the price they are looking for and they feel they may get someone to overpay for the benefit of the creative terms. It doesn't necessarily mean it's not worth doing, but you should make certain you understand the process and what the value of the home truly is for your client. It's possible that for some clients it may be a way to " get in the game"
Jim Fishinger
Excel Properties
Broker Associate
DRE 00882123
0 votes Thank Flag Link Wed Sep 28, 2011
I have never heard of them. I dont even think Rent to Own exists now days since the Market crashed.
Let me know if you research any further, I get a lot of questions from Buyers on this matter.

Vadim Agamirzoyan
(877)247 MySD
Web Reference: http://www.SDhomes4sale.com
0 votes Thank Flag Link Wed Sep 28, 2011
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