Posted by tom on October 21, 2003 at 06:06:12:
well back in the old days you could do a wrap mortgage. now the same is done with lease to own. however the legal situation is different with the latter. i would have to say i am not a big fan of lease to own, due to the unclear nature of the legal relationship. i do have two of them tho. one is going ok, and the other is a big mess. i am finding it true that people who cannot exercise their option are going to be mightly MAD when they cannot take title. so off to court we go…
i own a mortgage as well, and it was on a free and clear property. with a new buyer first you could do seconds on your properties…but on the whole i would have to say why get into lending? without bank leverage, your rate of return is going to way down over ownership, exchanging is out, your capital is tied up…where is the upside?
when i find myself thinking of doing lending, it is usually because i am not motivated to go out and find more deals (that is where you make your $$), or don’t want to get into something larger, etc. RE is scalable, why don’t you keep your return up by exchanging into some commercial property or apartments.