We're looking for a lease option to buy in rohnert park/ Santa Rosa....how does this work?!?

Asked by Amy Delao, Pittsburgh, PA Sun May 5, 2013

App how do we find homes?!

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John Arendsen, Agent, Leucadia, CA
Tue May 7, 2013
I just came across this post on a Linkedin Manufactured Home discussion group contribute to. RE professionals may want to rethink any advice they are giving their clients or on public forums such as this. I'm sure this applies to any lease/rent to own real estate transactions:

"MH Community Fined Over Rent-to-Own
The Pennsylvania Department of Banking and Securities determined that Cumberland Valley Investments, Inc. d/b/a New Oxford Mobile Homes was engaging in unlicensed activity when they entered into rent-to-own contracts with consumers.
I have been telling people for several years now that Rent-to-own and Lease-to-Own contracts are treated the same as installment sales contracts in most states. They create a security interest in property, the same as a mortgage, and proper mortgage licenses are needed when originating installment sales contracts.

As such, while there is no legal prohibition against doing Rent-to-Own and Lease-to-Own, there are requirements to do so, including having the proper lending licenses, an MLO on staff, and full compliance with state and federal requirements that requires a properly trained Compliance Officer and a full Compliance Management System.

Cumberland Valley Investments, Inc. was fined and required to obtain the proper licenses as required by the Mortgage Licensing Act. The state was more lenient that the CFPB would have been, so they were lucky. At least they are still in business."
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Craig Saxon, Agent, Santa Rosa, CA
Sun May 5, 2013
Hi Amy,

From a technical standpoint you have a separate lease, purchase agreement and the option agreement to tie them all together. I've sold a property that way myself, but It's a rather involved explanation I could better go into with you offline. It should probably be reviewed by an attorney to be sure it doesn't get classified for tax purposes as an installment sale.

From a practical point of view, it may be difficult simply because it may be hard to find a seller willing to sell on those terms. Sellers here have Buyers willing to pay top dollar due to a lack of inventory and low interest rates; so there would have to be unique circumstances that would interest them in selling on a lease option basis. Having said that, there are those situations that come up where it might make sense; it did for me at the time.

Feel free to contact me at 707-541-2345 or csaxon@rpadvisors.com to discuss further.

Craig Saxon
Broker CA DRE #00669675
0 votes
Steve Parsons, Agent, Salisbury, MD
Sun May 5, 2013
The best and quickest way to find what you are looking for would be to contact a local REALTOR. They'll try to find you exactly what you are looking for.
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