The NEGATIVES of lease purchase - Posted by Dan

Posted by Dan on July 07, 2003 at 08:10:10:

Thanks for the suggestion. I thought of that option and it won’t
work for me. Besides, I don’t think that my stand on this is
relevant since the whole “relative” thing is a part of the picture
with her. I could possibly offer better L/O terms but how good
would they need to be to beat out the charity case of her cousin?

Right now I really need the NEGATIVES of a L/O. Folks, is it
possible that no one here can list the negatives of a L/O? Where is
the CREOnline line that I used to know? :slight_smile:


The NEGATIVES of lease purchase - Posted by Dan

Posted by Dan on July 06, 2003 at 20:46:27:

I am trying to buy a house form a seller who almost lost it to
foreclosure. Obviously, she has a mortgage that is in arrears. She
declared a Ch. 13 bankuptcy to get out of the foreclosure. This was all
back in March, 03.

I was looking good on the deal until a cousin of the owner came up with
the idea of doing a lease purchase on the house.

The seller is going to check with her attorney this week to make sure
that she is doing the right thing. I, of course, think that she is not and
have given her some of my reasons.

I guess I would like some help as far as coming up with other reasons to
discourage the seller from doing a lease purchase with a relative.



The seller CAN’T do a lease purchase… - Posted by B.L.Renfrow

Posted by B.L.Renfrow on July 08, 2003 at 24:30:49:

…with the relative, with you or with Donald Trump himself unless the bankruptcy trustee approves.

Unless the chapter 13 has been dismissed, the trustee has control of the property, NOT the owner. If you enter into an agreement with the owner in bankruptcy, without consent of the trustee, the owner is in violation of federal bankruptcy law and you risk the sale being reversed by a PO’d judge, especially if there is equity.

Do a little reading here about bankruptcy. This has been discussed ad nauseum on this newsgroup the past few weeks.

Brian (NY)

Re: The NEGATIVES of lease purchase - Posted by Philly Newbie

Posted by Philly Newbie on July 07, 2003 at 23:04:57:

I agree with GL. You shouldn’t even have to explain to a person “THE NEGATIVES OF A LEASE OPTION.” If her relative wants to lease it out with her let him do it. You can walk away and if they call bid lower than their asking price…WAY LOWER! Make sure they have your phone ####…and go find another deal happy searching. See you out there.

P.S. You can look at it this way also…WHY WOULD YOU EDUCATE A SELLER TO REI?

Re: The NEGATIVES of lease purchase - Posted by GL - ON

Posted by GL - ON on July 07, 2003 at 17:53:48:

One of the most powerfull negotiating tools you have is the power to walk away.

You don’t have to buy anything. There are millions of properties out there.

So don’t get into a bidding war you can’t win and don’t come off as a sore loser tearing down their dreams.

Tell the seller you are very happy that they have solved their problem and that their relative is taking over.

But if they change their mind for any reason, give you a call.

When they call, which they will about 50% of the time, tell them you would be happy to make an offer but circumstances have changed and you can’t make it quite as good as the last offer.

If they are motivated this time, and they should be, you can write your own ticket and get it accepted immediately.

Re: The NEGATIVES of lease purchase - Posted by Marcos

Posted by Marcos on July 07, 2003 at 08:42:02:

Sure, there are plenty of negatives on a L/O.

  1. The mortgage is still in their name, and THEY are responsible, and how are they going to feel with that weight around their neck?
  2. What happens if the house needs a major repair, where are they going to come up with that cash?
  3. Now they are a landlord, and worse yet, a landlord to a family member. How are they going to feel if their cousin loses their job, and they have to kick them out of the house? Is being a landlord something they feel they could be good at? And what if they have to evict their own family member, how will that feel, and how will the family react?
  4. What if the cousin decides the house isn’t for them, and they back out of the deal, now they have to find a new tenant, or sell the house, and now they’ve got to pay for a mortgage for a house they don’t even live in.

This is just a start, I’m sure you can come up with dozens of others. There are plenty of reasons why selling now is the best thing to do. Be creative.



Re: The NEGATIVES of lease purchase - Posted by John (Rome)

Posted by John (Rome) on July 07, 2003 at 01:41:15:

perhaps you should have considered keeping your options open and offered to L/O the home yourself at better terms if that’s where she’s headed and you can’t steer her back on the course of action you had originally set out…y’know a stranger that starts saying "you can’t do this or that… yada yada…might just be putting himself in the wrong light (good intentions and all)



Re: The seller CAN’T do a lease purchase… - Posted by Dan

Posted by Dan on July 08, 2003 at 08:45:53:

Now this, THIS is just the gold nugget I was looking for.

It sounds to me like I am not even going to have to worry about
convincing her anymore.

If she goes to a lawyer to ask about this she is going to find this
out. If she does not, I will tell her.

That puts me back on top as the buyer of the property.

I am very glad that you answered this one. I appreciate it. And I
will do a little reading about bankruptcy, too. :slight_smile: