How do you handle this seller's objection to LO? - Posted by Dmitry

Real Estate Investing
#1

Posted by Lynn on November 07, 2000 at 23:53:32:

Most lenders will give him 75% credit for the lease payments that you make to him under the lease-purchase agreement. All he should have to do is give them a copy of the lease.

If he wants to get 100% credit for the payments against his mortgage payment you can do a contract for deed instead of lease-purchase. Win-Win. We have had good luck with this.

Yes, the lease payments are income for tax purposes, but he will also have deductions of interest, depreciation etc. So the net result should be about nil. He should consult with his CPA for his specific situation.

Happy Investing!
Lynn

#2

How do you handle this seller’s objection to LO? - Posted by Dmitry

Posted by Dmitry on November 07, 2000 at 22:39:00:

I have a seller with a mortgage balance of $114,000. He was trying to sell the house for $118,000 - no takers. He is credit conscious, so he declined “subject to”, but would consider a Lease/option. He is willing to lease option to me with the monthly payments equal to his mortgage payments and the strike price equal to the loan balance at the moment of option execution. His only concern now is to get out of this house and be able to qualify for a new loan on a new property. Will the fact that he already has a loan, but receives monthly rent payments in the same amount prevent him from qualifying? Will the lenders look at the rent he will be collecting as income? At the same time, will this rent be considered income for tax purposes (i.e. will he have to pay taxes on it)?
How do you overcome these objections?
Thanks.

Dmitry