L/O ??? - Posted by Patricia

Posted by Patricia on May 05, 2001 at 18:50:47:

Thanks for the reply.

You cleared a BIG misconception.

:slight_smile: Patricia

L/O ??? - Posted by Patricia

Posted by Patricia on May 05, 2001 at 16:26:17:

Is it common practice to advise the tenant buyer at any time that you are not the actual owner of the house. If so, how do you explain it?

Also what is the worst situation you have had as a result of a lease option?



Re: L/O ??? - Posted by Matt B

Posted by Matt B on May 05, 2001 at 17:02:18:

The only time that I have ever told a tenant/buyer that I’m not the owner of the house is when they went to get financing and the subject came up. It wasn’t any sort of problem for them though. It didn’t change the deal in any way.

Really, the issue of ownership never comes up with tenant/buyers. If it ever does, I am always completely honest in my business. I will tell them the truth. If it’s a problem for them, which I can’t see any reason why it might be, then that’s fine. I have plenty of other buyers out there that I could sell the house to.

The worst situation I’ve personally experienced with a lease option is when the owner wanted to back out of the deal because they had found a cash buyer. I already had a tenant/buyer in the house for nearly a year. The owner went to the house several times and spoke to my tenant/buyer, asking how much they were paying in rent and how much they had paid in a deposit. When the seller learned that I was actually making money from the tenant/buyer, they were even more upset.

The seller was upset despite the fact that I explained to them exactly what I would be doing with the house and that I would actually be making money from it. Any way, I almost recorded a memorandum of option against the property. Luckily, I simply had my attorney send a letter to the seller telling them to stop molesting the tenant/buyer as this was a breach of our agreement. Also, the tenant/buyer just got qualified for financing right after this, so I didn’t bother with the memorandum. It ended up working out OK.

Re: L/O ??? - Posted by JohnBoy

Posted by JohnBoy on May 05, 2001 at 19:18:32:

You ALMOST recorded a memorandum after your tenant/buyer has been in the property for a year? Are you not recording anything against your properties when you L/O them to protect yours and your tenant/buyers interest so you can insure them clear title when they decide to exercise the option?