I hope you having a nice holiday weekend.
As many know getting a bank loan right now, especially for an investment property isn’t easy with out a nice down payment.
One area I am interested in is entering into a lease option with the seller at a reduced price. With a short period of time on the contract, maybe six months, with the possibility to extend if needed. Then turn around and, using a buyer on my list who can’t get a loan now but might be able to qualify in a few months to a year. Put them in the house under a new lease option at a price above my lease option.
So it would address these issues:
Hard to find a loan – So get owner financing
Hard to find a buyer because they can’t get a loan either – so offer owner financing to them as well
Is something like this even possible, if not is there a similar method that would basically allow you the investor to purchase (or lock up in some type of contract) the home. Then allow you to lease option/sell it and keep the equity you found by offering it at a higher price?
I’m asking this because I have other buyer/tenants that are in this situation and I know of plenty of home to fit their needs at prices well below FMV. I just don’t want to have to purchase them with loans that require high down payments.
I suppose my another option would be to use the down payment from the tenant to pay for closing costs on a loan that I would take out. Then lease option it to them.
There are many posts that are similar to this and come close to answering it exactly but I haven't seen one that answers it verbatim.
Thanks in advance for your advice.