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How to Sell Your House Rent to Own
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- เผยแพร่เมื่อ 5 ส.ค. 2024
- Discover how to sell your house on a Rent to Own. You'll learn why the Rent to Own is so powerful, 101 lessons, advanced tips, potential pitfalls, and much more.
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Every successful real estate investor has a mentor. Get your mentor here: www.freedommentor.com/apprentice
literally the best TH-cam channel for people that would love to be in the real estate business in the future.so much info! thank you Phil!
Hi Phil. Loved your bid on the rent to own. Prior to this, my wife and I had been trying to sell our home, but no luck after 6 months. We live in a small town in Tennessee where more people seem to be leaving than are coming to live. We own a 5 bedroom 1 bath home built in early 1900. After watching your video, I started to think "I can do this" Phil made it so simple. While talking to a neighbor who was looking to buy their own home, but, due to a recent divorce both had credit scores below 600. He was a registered nurse and she worked for an attorney. Good income, but needed time to increase their scores. We were asking $60000 and proposed this idea to this couple. I would let them rent my home, for 18 months to give them time. I proposed they put $5000 down, pay $500 per month rent then after the 18 months, secure the loan. Money was direct deposited to my account first of month from their account. My mortgage (PITI) was $385/ no. Giving us a $115/mo positive cash flow. This was a win/win for us both. The deposit would come off the purchase price but non refundable if they backed out. The principle they helped paid was also helped reduce the purchase price by an additional $1185. All this was accomplished within 10 days of watching your video.
@@ronjackson1934 thanks for sharing. Did your tenant buyers ever cash you out? If they did were the tenant buyer able to use the deposit they gave you credit towards their down payment? Thank you
Best narrative for the situation I have seen. SIGNAL for sure, I hear ya Loud and clear Phil
Another awesome and insightful video Phil! I'm in the process of finishing a total rehab on a house I purchased for $7500 in Louisville, Ky. I was planning on going the rental route but after watching your video I will definitely be trying this! In the last month we've had a landlord shot and killed while collecting rent from his tenant and a house that was burned to the ground after the tenants were evicted. Have to be more diligent about who you rent to these days for sure.. On a side note my copy of Real Estate Investing Gone Bad is supposed to arrive today and I can't wait to read it!
Great video Phil. There's a tremendous opportunity to use this strategy like you said when they are set up properly. I appreciate you taking the time to make this video.
just subscribed to your channel, great info. I love the straightforward and simple way of explaining real estate lingo. Love the video.
What an amazing channel with such a wealth of information. Stumbled upon this channel and boy am I happy.
Hi Phil !..quite interesting and very informative, thanks for sharing, I've made my notes.
very good info thank you
am not a owner but was thinking to get into rent to Own and this info open my eyes , to pros and cons
Thank you Phil - this is gold.
Good stuff Phil‼️ Looking to do a rent-to-own on our primary residence. Great tips‼️
I like your video you have gave a chance for financial freedom (Each one teach one)thanks I've passed your info to other
Thank you, so good. I would not have known about rent to own.
Wow. This 22min video is so helpful. Really, I just wish that I have had seen this sooner. My parents bought a house for 70k 13yrs ago and last year we sold it for 79k :( ( was in time sensitive to buy this " better " house ). A friend of mine suggested us listing it for rent ( since we almost paid off the house) but at that time, we all just thought why would we want to do that ??
Excellent video! Thank you!
You have given us all a lot to think about. Great video with great tips! I will check how this works in the UK. My channel is very basic compared to yours. You are the Jedi Master in terms of knowledge! Thanks Phil.
Dude, this video is packed! Thanks!
Great information. Thanks Phil.
This is the best info on Real estate ive heard.
Its always looks good on paper, but can be life a life changer if you have brain, some money and master it...thank you for reveling those secrets and yes market is tremendeous....
THANK YOU SO MUCH GOD BLESS YOU🙏
I’ve been learning from you for about 8 months. I bought and read both books. We decided to lease option our own home. We’re downsizing to a different situation. You were soooo right. We put up signs For sale or Rent to own exactly as you instructed. Our phone rang off the hook! For 3 exhausting non-stop days we showed our home. We chose the people and in 4 weeks we do the deal. We got a local real estate attorney to draw up and file the papers. My only question....since we will still own the house until they exercise their option to buy, what type of insurance do we need to keep on the property. P. S. Thanks for not using bad language and for keeping it fair for the potential tenant/buyers. There are scammers ruining this for honest people.
Disregard my question about insurance. I found your video on that. Thanks Phil. You have taught me so much.
Awesome information and tips! I look forward to your new video postings. Another pitfall that came to mind was if the leasee knew they would be evicted, and destroyed the house. Is that a likely scenario?
+David Gittens At least you have a bunch of upfront money to pay for it. And then you could still sue them for the damages after the eviction.
This is I think what I need to put on offer of my Villa to be more attractive in selling it while renting it.
Thank you sir.
coming from the person in the tenants position this is an amazing option to a massive amount of people and totally ethical
right on man thanks!!
Brilliant video...
Great information!!!
Amazing videos Phil!! Thank you so much for these great videos. May i ask you a question? How do you keep from getting too attached to a home you raised your children and are looking to sell so that you can move to a better area for your family. Thank you very much Phil.
I don't get attached to anything I own. It's just sticks and bricks.
Thanks Phil.
thank you phill.....
clear and consise..
Hi Phil,
Fantastic information! Is there any chance to get the lease agreement and the option agreement that you use. Thanks
Phil Pustejovsky my real estate coach. All the best from Croatia, EU. Your 🏠👣
Nice..Thank you..
Phil, GREAT video! Very informative. This is your first video I watched but definitely not the last. Subscribed!
I am a homeowner, house was HUD, I flipped it (2 years ago), it's worth almost double now and is paid off. Thinking of what to do with it next... So, question: Is it possible/legal/advisable to combine rent-to-own with owner-financing? I'm asking this because I want to give my future renter the option to buy it at anytime. Even after 8 years. Not only 2 years. It is important for me that the renter has the responsibility for maintenance. What do you think? What should I do? Thanks in advance.
Give him/her 2 years and if they treat your property well, you can always extend it.
Great information. what the laws in Michigan for rent to own.
Hello sir, Thank you so much for all the videos. I had learned a lot over the years. I was felt great to found out this video. But here are my questions, Do you think this is the best time for rent to own since interest rate are high and no one easy to buy the home ? I’m try to selling my house for last 7 months and not going nowhere. Everything remodel. New roof, new kitchen, new bathrooms so on. We are starting to thinking to make a rent to own. That how I found your video. Thanks.
Hey Phil! Quick question. If you find a home that you are able to do a Seller Finance, would you be able to turn around and do a rent to own on that same home and have a purchase price for a bit more than you are buying it for from the original seller? Thanks!
Phil - Can you do this in the state of Texas if your home has an existing mortgage and a tax lien on it? Thanks!
Phil, I can't say enough about you and the information that you share. You are truly amazing! I know you get these questions a lot but I just moved to Las Vegas and have been wanting to get into real estate investing for a very long time. I know that the RE laws in Vegas changed some last year and want to know if it is still possible to do these kind of deals here in Vegas?
+Renee Noelle We do them in Las Vegas right now.
Thanks. Phil
Phil,
I have a couple of questions.
I live in FL like you. may I assume that FL law doesn't view the rent credit as an installment?
Also, if the tenant buyer decides not to exercise the option at the end of the agreed upon term what do you recommend to do.... obviously evicting at the end of lease term would be an option but do you ever restructure or extend the terms if they have been good payers and just need some more time to put it together?
Do you ever do reporting to the credit bureaus to help them repair the credit if they have been reliable or help them secure their loan financing (ie - point them toward a friendly lender with a statement on reliability) so they can execute the option?
Can you please include forms you use for rent and lease agreement
Excellentvvideo. Tnk u
Hi Phil, great info here. I'm considering becoming a hmo landlord whereby you can buy, maximise income and refinance to move on quickly. However I like this rent to own idea as the hmo strategy is saturated in the U.K.
How can you use the rent to own strategy and move quickly without millions ready to invest? Thanks
question about rent credits. does giving rent credits give actual equity that can be used to cloud the title? can they demand that equity back immediately, or even when you sell later down the road?
Great video! Thank you Phil!
By the way, what is your experience on rent to own for townhouse/duplex/triplex? Thanks again.
Very difficult. Tenant Buyers are typically wanting to move away from an apartment complex, duplex, triplex; and into a single family home, a home of their own, where they have no neighbors on either wall and where they can have the white picket fence. The Rent to Own model is perfect for single family homes but for any other residential property type, it can be very difficult.
Hi Phil, great video. What would one do if the lender's appraiser values the house for less that what you and lease-option buyer agreed to? Would one just have to lower the price to what it was appraised at?
Just lower the price to the appraisal amount.
I know you're just making a short video I get that thank you so much. But the biggest headache for me is pulling double insurance not only have to have homeowners insurance myself on that property but I got to have renters insurance also on that property
We invented a technique that avoids the double insurance issue but we only share it with those in our Apprentice Program. Over the past 20 years, we've solved most of the major issues that plague creative investors but those discoveries are proprietary and we keep them close to the vest.
Phil, if the market takes off (like it has here in Florida), then the tenant could purchase the home at the option agreement price even though the value of the home may have increased by $100k, correct? Or is there another strategy that investors can implement rather than hoping the tenant falls into the 90% who don’t end up taking the option?
It's easier to sell it than to buy it. I've bought them for cheap from here and then flip it for 10x price.
Freaking awesome video!!!
I wish I had seen this video before I sold my house by Land Contract for 10 years. They buyer stopped paying the insurance after one year so I've been paying for their insurance for 5 years so my investment is protected.
It should have been written into the Land Contract that the borrower maintain insurance.
It was in the contract. Two months into the contract I came to the property and asked what insurance company they were using and he said: "none, we haven't gotten any". So I went out and got rental property insurance on the property that day. For the first 8 months he was reimbursing me for the insurance then he decided he didn't want to pay for it anymore. I told him he has NO chance fo ever receiving the deed until he pays me for the insurance and he said: "I know that". I wanted to evict them that day but my husband was worried that it would take a long time to get them out and in the meantime, they would destroy the place. I spoke to an attorney about this issue a couple of years ago and he said "the family has been paying on the contract for almost one-third of the life of the contract now so no judge will evict them this far into it. At this point, I'm not sure what my options are. I'd love to kick them out but not at the cost of my property being torn to rebel. I kind of feel I need to just pick my fights with them. At least the rest of their payments are on time. I know that next time I need to be smarter by becoming a member of your Mentor Program so I'll have access to better contracts & receive good advice on how to handle this kind of issue as soon as it starts. I feel this is a good example of what can go wrong when you try to go it alone. THANKS FOR ALL YOUR TEACHINGS PHIL!!
Great video. You said there was a video about installment sales or this new law. Can you link the video or tell me the title of that video? Thanks!
That's the Frank Dodd Act th-cam.com/video/krlfPVR9eZI/w-d-xo.html
My question is this:
Say I got a 70k property and the sale price on the contract ends up being 80k based on predicted estimates for 2020. The entry deposit I charge to get in this option is 1000. Rent usually would be 600 per month though market value is 700 month. I charge 700 on this lease option that I'm paying 400 a month of mortgage on. 2 years go by and my tenant has paid a total of 16800 dollars. On an 80k property that's over 20% equity. How much of that rent would count as equity towards the purchase of this house? Would it just be the difference between the rent and my mortgage? Rent and market value? Or can I use the whole payment towards getting this tenant some equity?
Hey Phil, great content! I'm about to list my property rent to own and I was wondering if there is anything special I need to do about the pool. Is there any way I can structure it to absolve me, or do I even need to worry about that since they intend to purchase? thanks!
Talk to an attorney so that your lease handles this potentially major liability. Also, make sure your insurance is correct. See this video: th-cam.com/video/SyeZa1DTidU/w-d-xo.html
Hi Phil, what about Texas? What would you do as far as rent to own in Texas if you lived here?
Fantastic video!
Awesome! Glad you enjoyed it.
Does this applies to a buyers' market? The deposit and monthly rent credit (assuming that we deduct the deposit from the purchase price) does not reduce the purchase price enough. If a buyer can agree to these terms, they are able to purchase without entering a rent to own agreement.
Phil thank you for speaking in a very polite manner and not using dirty slang, I have been watching some other youtube people and it's not nice. Good luck
Hi Phil, Fantastic video! I bought your books they are terrific! Can you charge over the current max value of a property if the annual price increase of property in your city is averaging 10% every year for the last 3 years? Can you conduct a multi-applicant negotiation process to find the person willing to pay the most? Thanks
Of course you can create a competitive environment to bid up the terms of the deal
I am confused regarding the rent credits. If the 'rent' is $1200", the rental credit is $1300, is the entire $1300 credited towards the purchase price? @12:55 Phil refers to $5000 down payment. Is that separate from the Lease Option? As I understand it, the lease option payment is completely separate from everything else.
another great video Phil.. I've been having a lot of issues trying to sell one of my properties here in Hampton VA. I have a lot of little projects that need to be done in the house. I don't have the money to finish any other little projects so we're trying to sell it as is a real estate investor came by today and offered 75 thousand. or do a "subject to" agreement. I owe $80k and have a home improvement loan for $22k. so I want to break even and sale for $102k. we have new Cabnits and tile floor in the kitchen. both bath rooms have new tile and tub/showers & Vanities. Wooden floors have been sanded and stained..new furnace and new paint. (thats where the $23k all went) issues is the base boards need to be either paint or replace. the paint from the ceiling in the kitchen is like pilling off. needs new carpet in the small 4th bedroom. needs new interior doors for all rooms/ closets and laundry room...1 contractor said it would be $17k and another one said $10k..the house is just setting and its pretty frustrating.
redfin value is $131k...the city rehab the house across the street from my property and sold for $140K.
Try selling it on a Rent to Own to someone who wants to take over your little projects. Don't try selling to another investor because they will never pay you as much as a Rent to Own Tenant Buyer looking to put some sweat equity into a property.
+Phil Pustejovsky will do. thanks for the advice 👍🙌🙌
Phil quick question for ya, what happens if the tenants end up buying the home? Could you explain how that works? Love your videos Phil and Im a REI from Buffalo! Thanks for you time Phil
That's the whole idea, isn't it?
Hey Phil, any issue with setting the future purchase price to include assumed appreciation, option down payment, and rent credits? That way when they go get their bank loan the adjusted price is still (assuming appreciation) in line with an appraisal.
No issues.
Thankyou
Awesome tips Phil!! Quick question can I apply these tips to a land/lot? I'm trying to sell a one acre lot with NO house on it, just the land, but with no success. So I thought maybe a rent to own option can help sell my property. Any tips and advice is highly appreciated, thanks Phil.
You can certainly try it. What most land sellers do is sell with owner financing (or a land contract) rather than rent to own.
This video is literally gold!! Question: when you refer to ‘legal help’ who specifically besides an eviction lawyer should we have on the team to assist with legal documents and information?
Also, I live in Louisiana
A great eviction attorney is all you really need. A real estate closing attorney is helpful too; but not as important as an eviction attorney.
Great video Phil, Thank you ! Questions: What is the best method to locate properties that I can offer their owners the lease option ? (In otherwords I dont own the house I want to be the middle man and profit from the difference between deposit to seller and deposit from tenant or buying and selling price if actual buying at the end is exercised). After I have the contract with the seller, can I put the property on Zillow/Trulia etc or would that create a problem for me with the owner ?
Watch this video from start to finish: th-cam.com/video/XBKMzkLl5Ls/w-d-xo.html
"Go with a hand-written sign, this one is not hand-written but it looks hand-written." LOL! Love the vids, thanks! Any chance of you posting your Rental Agreement and Option Agreement somewhere?
If he was any funnier he'd be dangerous!
Talk about dangerous watch this! th-cam.com/video/BBoAkglLM0I/w-d-xo.html
Hi Phil,
I like the idea of sell to own and started the conversation with my current tenants. Seems like they like the idea as well. I am planning on to have the rent to own period of 2 years. How should I price of the price of the house? The current market price or the price of the 2 years appreciation anticipation price? What is the "normal" down payment? 3-10%? Thanks
Price: The highest amount it can appraise for today.
Down Payment: As much as you can possibly get. In this situation, those tenants are probably living paycheck to paycheck, so I doubt they will have anything additional to give you. You'd have to find someone new to move in that would have the down payment money.
+Phil Pustejovsky Is there a program out there you recommend or that you have that will teach the rent to own process?
I teach my apprentices how to do it. I don't sell a separate program on it though.
Mr. Pustejovsky I've watched a bunch of your video, I'm very happy I'm learning a lot. Thank you.
My question is when I get ready to buy a house what is the best way to find a house. When we bought the house we live in we got lucky.
I was riding around looking and I was using the internet and I had a realtor. But the house we found where under contract. It's like we where always late on a great deal. The house we live in we got a good deal. How do you find a house with a great deal?
This video explains why I don't share that top secret information with the general public: th-cam.com/video/Ja_aWvu4HVI/w-d-xo.html
+Phil Pustejovsky I understand, thank you.
I visited your web site as well, I'm very excited about a lot of things you and your team are doing. I need to finish what I started with getting my ducks in a row but I look forward to reaching out to you in the near future. I hope I'm in a area you will approve of.
@ Phil : first, thanks for the knowledge you are sharing on your videos. I have a question regarding this video: how do you determine how much the upfront option price should be? I come from a market finance background and this looks like writing a call option on the asset. My concern is if the market goes up a lot between the time you agree on a fixed sales price and the time the option expires .. you are incurring an opportunity cost (granted the tenants exercise the right to buy). For instance if the property appraises for 400K on the day the 5K option is signed on, you’d pocket the option price and move on. Now 3 years later, the property is worth 500K market value based on comps. You’d lose 100 - 5K on the deal? (I understand part of this would be offset by the rent payment too)
Seems like you’d need to raise the price of the option to protect you further from the eventual opportunity loss here.
Maybe I’m missing something.
Real estate doesn't raise in value that fast. It's very different from publicly traded equities. I don't have a set option amount; but instead, ask the applicants how much they have to put down and usually, the one with the biggest amount wins.
Phil Pustejovsky great, thanks for sharing.
Phil - one question on rent-to-owns. Are there specific types of properties/houses that work best for these kind of deals? What have you had the most success with? (i.e. specific home type/size/quality) Also, what are your thoughts on sandwich leases? I've also heard of deals where investors have bought a house via a lease option, and then while under the lease, the investor brings in a tenant that pays more than the cost of the lease - thoughts? A lot of questions here, sorry!!! THANK YOU!
3/2 single family homes are best
AVOID sandwich lease options. Many reasons, but the most important one is that if you are not the owner, the original borrower/owner could further encumber the title
Phil, Is option up front payment deducted from final sale price if they buy the property or is that separate from buying/selling price?
Deducted from the final sales price
The other down fall is that in Florida we are in another major bubble again that is getting ready to pop, so most likely the rent to own people will not buy at the end. If we get a 30 to 50% drop again with hedge funds dumping rentals and etc, then the owner missed the opportunity to sell close to the peak.
Hedge Funds are the smartest guys in the room. They haven't started dumping yet, which tells me, that either they think the market will continue to improve; OR, they are making so much money renting that they have no interest in selling in a very long time.
Is this a good idea when getting into a property ? i.e. Im buying a home and would be willing to initiate a rent to own upon purchase... is this a good idea ?
Great vid Phil. I feel like a heard a contradiction though. You said the upfront fee is non-refundable. But you also said that IF they don’t pay, they don’t get their upfront money back. So do they get it back if they pay on time or is it non-refundable period? Thanks again!
If they exercise their option to purchase, whatever amount of option they paid at the beginning goes towards their purchase. If they don't exercise their option, for any reason, even if they paid ontime, it's still non-refundable and they forfeit it.
thanks Phil ,my situation is that my wife has a best friend that lives and owns a house in Vegas and wants us to move out there And we do also. what's the best quickest way to make everybody happy without taking out a loan to purchase her house. I've been doing some research and watching your videos i find owner finance might be the best bet ,I was wondering if rent to own might work also and if so how will I sale her on these offers.
Structure creative financing (Subject To if they have a loan; Owner Financing if they own it free and clear, or a combination of the two)
When you do rent-to-own on a condo, who's paying the condo fee? Is there a rule, or it's something that can be negotiated.
For example, I own a condo (Montreal, Canada) I might put on the market as rent-to-own. last year we had a special contribution to the elevators (10K). Who would be paying that?
Thanks. Great videos!!
The owner of the property continues to pay the taxes, the condo fees, the underlying mortgage, etc. The Tenant Buyer is paying you Rent. If there is a special assessment, you as the owner pay it. Remember, the Tenant Buyer is still a Tenant until they get their own loan to purchase the property.
there is another real estate trainer who worked for D. Trump and he teaches the (rto) lease options as that you mark up the agreed purchase price, collect a non refundable down payment(usually 3-5% from the tenant buyer) then the difference in monthly, then the difference in sales price. you end up getting paid 3 times, I haven't done anything but a couple wholesales but intend to start making multiple offers on properties utilizing the lto strategies. any feedback regarding that approach? thanks for the great training Phil!
I read an article in regards to the instructors for Trump University, and the research suggests that they were sales people, many of which are now bankrupt and at least one guy worked for Buffalo Wild Wings while instructing people are real estate for Trump University. I share this to say that you have to be careful who you learn from. What I shared on this video is signal, it's truth, you can bank on it.
Do you offer contracts for lease/options to buy
where can I download a contract for this?
What did you mean by "applying a rent credit when they move in, if case law prohibits you from applying rent credits on a monthly basis"? Are you referring to applying it when they buy it? Also, do you have any recommendations for obtaining an option agreement? Real estate attorney?
What he means is, simply put it in writing right off the bat.. That when they exercise their option to buy they'll receive an additional discount off the purchase price. Essentially its a discount disguised as rent credits
so Phil with the rent to own does the rent money that the tenant pays to you go towards the option payment or is the rent separate from them paying off the house
Both; part goes to paying down the agreed upon purchase price in the form of rent credits; and the rest is considered rent.
Who pays the property taxes and homeowners insurance? Do you just adjust the rent to cover them similar to a mortgage escrow?
You as the owner pay those two monthly bills but as you pointed out, you can raise the monthly payment you charge the Tenant Buyer to cover them (so long as you don't go way above market rental rate for the area).
Is it advisable to help the buyer repair their credit or build it up so they can qualify for a mortgage? If so would you use a company to do this or is there a way for landlords to report monthly payments to their credit file.
I send my Tenant Buyers to a credit repair professional to fix it. However, if they don't follow the credit repair steps outlined for them, I stop the program.
I sent to own right for a low income? Do you have to pay a deposit?
Phil - Would it be possible to rent-to-own from a landlord and then sub-lease it to another tenant with a mark up on the rent and purchase price?
Yes. It is called a Sandwich Lease Option. The only thing that would prevent you from doing that is if your lease with your landlord restricts sub-leasing.
Hey Phil, do you have a book specifically on house flipping for profit?
mark loeffler - rent to own , Great book Read it cover to cover
Hey Phil, In the rent to own method who who receives the tax benefits of the asset the owner of the property or the potential owner because they making payments?
Owner, not the tenant buyer.
Can you report to credit bureaus to help tenants' credit (or hurt if they're bad tenants)?
Yes
Good video
Hi Phil, great video very informative. Would I have to pay back the down payment and monthly rent credits if the renters decide to purchase?
It's built into the final option price, so you don't "pay it back".
Would the buyer have to pay a down payment to the lender?
Depends on whether or not what the Tenant Buyer had already given you met or exceeded a lender's requirements. For example, oftentimes the non refundable option payment is at least 3% of the option price. That 3% is all the down payment that is needed for some first time homebuyer loans these days.
Got a Villat that's tenantless for over a year now and I am struggling as I no longer have cashflow. All due to government's new rule here in Asia.
Can you have a loan from a bank and do the rent to own technique or do you need to outright own the property?
Absolutely you can have a loan.
Thank you for such an informative video. Is it true that rent-to-own eviction can take anywhere from 6 months to over a year, because laws are different?
If you separate the Lease from the Option Agreement, you should be able to argue that it is a Lease and therefore should be evicted in that speed (rather than being recognized as an "installment sale" whereby you have to foreclose).
Phil Pustejovsky , good to know, thank you!