Krusty

Thanks MC...I am comfortable enough wording that part of the contract myself. Sometimes I think I need to be a lawyer but thats probably just another 'fear' hurdle to jump. Nevertheless, it is nice to have your common sense confirmed by others more experienced.

Guys...thanks for the great advice. The owners are ready to sign the contract. They would like the contract to expire after 1 year at x$ with and option to renew for another year at y$ and an option to renew for z$. Any idea how to word this or is this too complicated??

Hi All, I have a verbal go ahead on a CA. I hope to have the paperwork done up tomorrow or the next day (the owners are in Panama). Here's the deal: -They own a semi near where I live in Ontario, Canada. They have relocated to Panama and the house is vacant. They do not seem motivated in the traditional sense. I think they are ok for money but like what the CA has to offer them. -The semi is clean and reasonably updated. It is a rental house. The top is a 3 bedroom and the bottom is a 3 bedroom also. Traditionally the top has been rented to a family and the bottom rented to 2 or 3 single people. The top and bottom have their own kitchen/laundry and separate entrance. -Market rent for the top is around $1400/month. -Market price from a CMA is $269,900 today. -We are writing the offer up as follows: after 1 year term net purchase price is $280,000 ($288,000-$3000 rent credit-$5000 assignment fee). Rent for the top only is $1850/month with a $250/month rent credit. The bottom will be rented by the sellers on a month to month basis so that the buyers can take vacant possession when the time comes or even better, if the downstairs tenants are good, then the new buyers can keep them on and collect the full rent from downstairs. A little twist...the sellers are willing to give 10% of the rent from downstairs towards the purchase price on the upstairs. Just a little bonus for the buyers living with tenants downstairs. Here are the questions: Is the rent payment too high compared to market price? I am hoping that the purchaser will see a chance to become a landlord themselves and will pay this rent price. Any things to be wary about regarding this odd set up? The sellers have mentioned that they would like me to manage the property for 10% of the rents. Is this a good idea? Anyone know if it is legal in Ontario (Doug or Steve)? Thanks for all the help...Russ. What a Christmas present my first deal will be!

I believe that we can only promise that both fees go against the purchase price. It is up to the lender whether or not they will accept either or both of theses fees as part of their required down payment. Promising that a lender will is probably considered fraud as you have no idea what the lender will do when it comes time to close. An angry t/b that you have made a promise to may decide to sue.

Thanks for the replies. Just to be clear, I have already spoken to the homeowner and been to the property. The homeowner has moved to Panama and he had his father meet me at the property. I am not able to contact him via phone, so we communicated by e-mail. I understand the sales process as I am a sales manager for a fortune 100 company. It makes sense not to give the homeowner too many choices. I guess I just hoped that one would peak his interest more than others and lock up the deal. I will let you know how it goes. Russ

Interesting that you post this. I just sent this e-mail to homeowners I am working with: I have had a chance to crunch some numbers. Based on a detailed competitive market analysis, I have valued your property at $269,900 currently. If you sold through a Realtor at 6% commission, you would net approximately $253,706. I have included 2 options for selling rent to own. The first is a $2000/month payment to you with a credit of $500/month to the buyer when they close. The second is a payment of $1600/month with a $200/month credit when they close. I have included a net price on both options for 1,2 and 3 years. Here is the breakdown: Current Market Price $269,900.00 Net Price-Realtor 6% $253,706.00 OPTION 1 Payment $ 2,000.00 Rent Credit $ 500.00 Net Price after 1 year $277,750.00 Net Price after 2 year $286,900.00 Net Price after 3 year $295,900.00 OPTION 2 Payment $ 1,600.00 Rent Credit $ 200.00 Net Price after 1 year $281,350.00 Net Price after 2 year $293,900.00 Net Price after 3 year $309,900.00 Please let me know what you think. Also, once again I will be out of town today returning early this evening so I will not be able to respond to any questions until around 6 pm. Thanks again, Russ > I am also looking for feedback and wondering if I said too much. Any thoughts on this approach?

Doug...just curious...you said ""Hi I saw you house on fsbos-waste-your-money.com. I'm a rent to own specialist and I'm looking for homes for qualified pre-buyers who are looking to lease with the option to buy within 1 or 2 years. Is that something you would be willing to consider?" Does this mean that you have changed from using your Agreement for Sale contract?

Thanks for the response...no gobble gobble for me! I am Canadian. I think I will go hunting for beaver instead!

Bev...I apologize if you have already covered this, but are you dealing with large, medium or small builders (or all of the above)?

Good thought but it sounds like you are an agent or trying to be like one. How about: I'm NO agent, so there's NO commission! I'll buy or rent your house for top dollar!

MC...us Canadians are not used to a life without shrinkage! Doug...thanks, I will let you know how it goes...

I am also in Ontario (Newmarket). I am meeting a lawyer tomorrow night to review some contracts as well as create a Joint Venture agreement. I have found a private investor with deep pockets who is interested in buying and rehabbing or buying and selling on contract. I will let everybody know the results of my lawyers meeting. Thanks, Russ

I'm not Doug, but I'll give it a try. In a Cooperative Assignment, you are not buying the house at all. You are setting up a rent to own situation and assigning your interest (for $$) to a retail tenant/buyer. As such you don't worry about cash flow or future home values. Having said that, it is in your reputations best interest not to put a t/b into a home that they never will be able to afford.

Doug, so in Ontario, using an installment sale, if a t/b'er misses one payment you can ask them to leave as the terms of the contract have not been met? I'm not saying you would like to do this, but just wondering if this falls under the tenant/protection act in Ontario or straight contract law? Thanks, Russ

Gordon, Just curious as to what forms you are using/intend on using for CA's? I am in Ontario and I also bought Matt Bowman's courses and forms. I know that Doug uses forms that are more like a Land Contract with assignment due to the power of sale process here. Doug...would these forms not give the t/b equitable interest in the property even if they defaulted?