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    askingexperts Posts: 3, Reputation: 1
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    #1

    Feb 21, 2009, 12:07 PM
    Rules for Rent-toOwn Real Estate?
    Hi,
    I haven't been able to sell my former home in this real estate collapse, but have tenants who would like to buy it. They have lousy credit. I am willing to carry the mortgage but need to know how to set it up so their monthly payments go toward their purchase and it doesn't hurt me on my taxes so they can buy it later this year or next.
    Can anyone help me? Even if you point me to some other places, I'll appreciate it.
    twinkiedooter's Avatar
    twinkiedooter Posts: 12,172, Reputation: 1054
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    #2

    Feb 22, 2009, 02:48 PM

    To protect yourself properly I would suggest you consult with a Real Estate Attorney. This way there are no surprises when it comes to them buying the property. If you try a do it yourself thing you may or may not include all the necessary legal language in case you need to foreclose or take back your home in the event they don't keep up their end of the agreement. It would be money well spent if you ask me.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #3

    Feb 22, 2009, 03:15 PM

    I would NOT recommend taking back a mortgage. Doing so will make it more complicated if they default.

    Instead use a Sales contract. Under a contract, they pay a deposit and pay you a monthly amount towards the sale price. If they expect to be able to obtain financing in a year or so, you can set it up to give them that amount of time.

    The contract is then written so if they default, then the contract reverts to a rental lease and whatever they have paid is forfeit. You can then treat them as a tenant and evict if they don't pay.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #4

    Feb 22, 2009, 03:19 PM

    You can do either a lease to own or a contract for deed.

    What do you mean as for as hurt you on your taxes, in either case your property tax is still for a rental, as would be your insurance.
    And the rent is rental income
    askingexperts's Avatar
    askingexperts Posts: 3, Reputation: 1
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    #5

    Feb 22, 2009, 05:35 PM
    Thank you all. I appreciate the help.
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