Short sale lease back

Asked by Gsgp, Maryvale, Phoenix, AZ Wed Jan 6, 2010

I am in the process of buying a short sale single family home in Phoenix and the current tenant/owner wants to lease the home back from me once the purchase goes through. I am concerned that the tenant will harbor resentment for losing their home and treat the house poorly. Does anyone have any experience in leasing a short sale back to the owner, or have any thoughts on the matter? Thanks!

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Mortgage Solutions 411’s answer
Mortgage Sol…, Both Buyer And Seller, California
Thu Aug 4, 2011
Gsgp
Carlos J. Ramirez is the only Broker on this list that makes sense!
We are an investment group and offer a leaseback program to homeowners… for owner occupied residential properties in 14 States throughout the USA – you welcome to email me @ mortgagesolutions411@yahoo.com for additional info. Will be happy to provide you with guidance and additional information.
1 vote
Anthony R, Both Buyer And Seller, New Jersey
Mon Jan 11, 2010
Keep in mind that many lenders will not accept a short sale unless all of the parties involved (buyer, seller and agents) sign an affidavit of "arms length transaction" stating that there is no agreement or understanding, written or implied, between the buyer and the seller that allows the seller to rent or regain ownership of the property in the future.

Personally, I wouldn't rent it to the seller. There are plenty of renters out there to take a chance on having some legal problems in the future.
0 votes
James Gordon…, Agent, Hamilton, OH
Mon Jan 11, 2010
Gsgp I would make sure that I had something in writing that I was not buying the home to sell it back to them at a later date. I can see the next wave of lawsuits hitting, people that did a purchase lease back and the current owner/new tenant sues for equity because they were not allowed to repurchase the home.
Not legal advice and sometimes my crystal ball gets foggy but cover your assets.
Web Reference:  http://www.Find1Home.com
0 votes
MrPrincipalR…, , Phoenix, AZ
Sun Jan 10, 2010
Yes I have alot of experience in the Legal tool to protect your Asset. Asset Protection is our speciality.
0 votes
Carlos Ramir…, Agent, Mesa, AZ
Wed Jan 6, 2010
I have had similar experiences in the past and in most cases the previous owners have taken very good care of the house - maybe because it used to be their home and/or are appreciative that you help them stay in the house. Treat them right and be fair and most probably they will be good to you too.

Although past experiences are no guarantee of future performance and you should always do due diligence, have everything in writting and perform a good background check!

Carlos J. Ramirez, PC, ABR, CNE
Associate Broker/Realtor, HomeSmart -
http://www.SmartAZRealty.com
0 votes
Mr.P, , Arizona
Wed Jan 6, 2010
Well, You really never know how a tenant is going to act, you have a valid question. I really feel it will depend on how you treat him, so get the rules in writing.

All in all, your lucky because you have someone who will rent it. Right now it is tough to find renters.

You do say that you are in the process of buying a short sale.....You are aware short sales average 90 to 120 days of insanity, and only about 30% actually close.

Good Luck, and take the renter.

Patrick
480-543-9899
Web Reference:  http://www.ZipcodeAZ.com
0 votes
Jeremy James…, Agent, Scottsdale, AZ
Wed Jan 6, 2010
Gsgp,

I would ask myself what is the gut feeling I get from the owner. You should treat this tenant like any other and run a credit check, obtain security deposits, and have hime fill out an application. Make sure you document serial numbers/pictures for all the appliances left in the house, and take pictures of the properties present condition... If you get a property managment company to represent you and collect rent and so forth it might ease some of the concerns, but ultimatly there is no sure fire way to make sure your tenant doesn't cause damage to your investment property!
0 votes
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