OfflineHey yall, Im hoping someone can give me some advice on this one. I had a client approach me with a pretty big head-scratcher. Her mother passed a few months ago and she inherited the house and all the belongings. Her mom was leasing the house to a very nice man who owns his own landscaping business. He wants to buy the place but wanted to save up first, so they worked out a 3 year lease with option to buy.
When they signed the agreement, she found out that he does not have documentation to be here. They are very friendly with each other, he is a hard worker and she really wants him to be able to keep the house, but she's worried he wont be able to get financing at the end of three years. She wants to sell the property, so that she doesn't have to get any more involved.
Normally, I would say just let me list if for sale for you. Evict him due to lack of docs or whatever, and you're done. But she doesnt want to go that route. All I can think is that she will need to market it to buyers as an investment property, with a tenant with a long-term lease? Is there ANYTHING she can do here so everyone's happy, or is she just going to have to boot him?
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
One of my very good friends is The L/O Wizard in TX. I have sent him this question for you.
Karen
"You're never too old to be what you were meant to be!"
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"Shining Like a Star & Dancing on Sunshine"
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Thanks so much Karen. You sure are a wealth of knowledge and help for me tonight!!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
Just wanted to help if I could. If she wanted to keep the tenant in place then I could recommend that the tenant get with a credit repair company if that is the issue for not being able to purchase at the end of the lease option. Let me know because I am currently an affiliate with a great credit repair company that will get his scores where they need to be.
Maybe she could sell it to him on a contract for deed instead? You are saying he is an illegal right not that he doesn't have a valid lease? Anyway
see if he can up with more down payment and convert to C for D then he owns property and pays taxes on it and she collects passive income.
Cathy B
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Here is the response from my friend who I actually trained with in Ft Worth for four days. He has a very busy L/O company there and closes 6-10 L/Os per month in TX. He has been doing this there for about ten years and knows his stuff inside and out.
"As far as the question from the agent…
The daughter should not have done a 3 year LO, as that is looked upon as a contract for deed in TX, and now Title 2 Chapter 5 of PRoperty Code applies.
She can't boot him out because he's not documented, and if she tried, he would have a free attorney working with him very quickly.
He won't be able to obtain financing since he has no papers, and Banco Popular is gone, so forget that.
Doesn't sound like he has much money, but I would have recommended she do an owner finance and get about 10% down or so.
She could put a 5 year balloon on it.
I'd see if she can do that and they void the 3 year LO."
I hope this will help.
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
Thank you all for your responses. Karen, that was the first thing I said was WHY on earth would you sign a contract with him before you talked to me! Oh well hindsight's 20/20 and all that. The owner finance maybe be possible but he's right, the tenant doesn't have much cash on hand. She agreed to the L/O at $900 a month for a home worth $160k... she's already losing here. You're friends suggestions give me a great start on figuring out how to work it tho. Thank you again, you rock as usual!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.