Home Buying in 75040>Question Details

Texas2step, Home Buyer in 75040

Is A REA a good investment?

Asked by Texas2step, 75040 Wed Feb 10, 2010

Hi There,
There is an alternative real estate investment called a (REA). You buy the house, in turn a real estate company pays me monthy installments. I haven't got all the information on how it works but i'd like someone that is familiar with this type of investment to tell me if this would safe to take a chance on.

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Don Tepper’s answer
You've got to provide a link. I tried searching on Google and didn't find anything.

I'm a Realtor and a real estate investor and I've never heard of it. It smells awfully fishy, though. You buy the house and some company pays you monthly installments. For what? To buy it from you? Or to rent it? Presumably, though, they're saying they'll cover your monthly mortgage with their payments.

That can work in certain cases--a sandwich lease-option, for example. Though most such techniques don't work on new/recent purchases. And a lot of people lost a lot of money on preconstruction sales in Florida and Las Vegas that promised exactly that sort of arrangement. You'd buy their newly constructed condos (or in some cases single-family homes) and they'd guarantee payments for 12-24 months. Problem is, the properties were terribly overpriced, and when the time ran out (for those communities where the developer didn't go bankrupt first), people were left with hugely overpriced properties that they couldn't rent.

Again, post a link to provide us more information, and we'll give you a better evaluation.

But at this point--since you "haven't got all the information on how it works"--I can promise you that no one can assure you that it "would be safe to take a chance on."

Post the link.

Hope that helps.
0 votes Thank Flag Link Wed Feb 10, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
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