1720 Francis SE
3 bedroom 1.5 baths
$2500 Down and $850/month
Rent To Own
Expected completion date: 3/15/08
Thursday, February 28, 2008
Upcoming Properties!!!!
Upcoming Properties!!!!
1715 Silver SE
3 bedrooms 1.5 baths
$2500 down and $850/month
Rent To Own
Expected completion date: 2/29/2008
Upcoming Properties
$85,000
936 Oakhill SE
4 bedroom 1.5 baths
$2500 Down and $850/month
Rent To Own
Expected to be complete 3/15/08
Upcoming Properties!!!!
$91,000
839 Oakhill SE
5 bedrooms 1.5 baths
1860 sq.ft.
$2500 Down $895/month
Rent To Own
Expected to be complete 3/4/2008
1434 Sherman
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Living room
520 Catherine ave. Muskegon, Mi
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1136 Dunham
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1045 Niagara
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Wednesday, December 26, 2007
Brief Explanation Of Rent To Own Options
A Brief Explanation of Lease Options
Lease Option is short for “Lease with an option to purchase.” This basically means that you have the exclusive Option to purchase the property you are renting for a fixed period of time. Exclusivity simply refers to the fact that nobody else can purchase the property during the duration of the Lease Option. This exclusive option is given to you in a document that is signed at the same time as the lease. It provides many terms to you and the seller. These terms include the length of the Option term, the purchase price of the house, the proper process for executing the Option, and the amount of the down payment. Lease Options always include a down payment, which is applied to the purchase price of the home if and when the Option is exercised.
Example:
After seeing the property and reviewing the rent and down payment requirements, you decide to “Rent to Own” the house at 1234 Main Street. The terms are $795 per month with $2,000 down and a purchase price of $85,000. You meet with the property manager to pay the down payment and first month’s rent. You will also sign a lease and separate Lease Option at this time. You will make monthly rent payments of $795 to the manager until you decide to exercise the Option. When you exercise the Option, you will notify the manager who will assist in preparing the Purchase Agreement—a document always needed when buying real estate. You will then work to finalize financing for $83,000—the final price after deducting the down payment. Once financing is secured, there is a closing with at Title Company and you officially own the home.
Buyer’s/Renter’s Responsibilities
Aside from paying the down payment, rent, and signing the appropriate documents, the buyer has other responsibilities when pursuing a Lease Option. First, the buyer has to pursue mortgage financing and be eligible before the expiration of the option term. Urban Pharm can provide referrals to mortgage lenders if needed. If the buyer isn’t immediately eligible, it is their responsibility to position themselves to be eligible before the option expires. This often involves working to improve their credit, employment, and assets. A loan officer or credit specialist is a good tool to guide you in the right direction. Finally, in “Rent to Own” situations, the buyer is generally responsible for taking the position of home owner during their rental period. This involves paying all utilities, including water, making any necessary repairs to the home, and maintaining the exterior (mowing the grass, snow removal, etc.).
Benefits of Lease Options
Lease Options have many benefits. First of all, it makes home ownership much easier. Financing for Lease Options is generally easier to obtain due to the fact that the home’s equity is used as collateral. When you buy a house outright without an option, the bank will not count this equity. Second, Lease Options allow the buyer to “test drive” the house before buying it. They can become educated on all of the positive and negative aspects of the home before making the investment of purchasing it. Finally, the buyer can treat their home as their own while renting it. If they are confident that they will be purchasing the property, they can make improvements or changes to the property to better suit their needs and tastes.
Negatives of Lease Options
Yes, Lease Options have their negative points as well. First, the down payment is nonrefundable. It IS NOT a security deposit, so it will not be returned should the option not be exercised. So, we highly recommend that you choose your Lease Option home carefully and verify that you will be able to obtain financing for the property prior to the Option expiration. Second, the buyer is responsible for all maintenance while they rent the property. This maintenance should be minimal as all of Urban Pharm’s properties are recently remodeled, but many issues are impossible to foresee.
Article from Dan Ho
The biggest real estate trend right now for the Great Lakes state is lease to own homes in Michigan. During difficult times, people always become more creative. With houses simply not selling, homeowners who need payment relief have begun to turn more and more to what is sometimes called the lease option to buy.
This strategy also goes by many other terms, the most common of which is known as the rent to own.
It is a method of selling homes that works better in some areas of Michigan than others. For example, finding a lease option to buy in Grand Rapids, Michigan is very popular nowadays.
This isn't surprising due to how livable the city is:
Minutes away from the shores of Lake Michigan
Named one of the top fishing cities by Field & Stream Magazine, July 2006.
Named as one of America’s Most Livable Communities
Grand Rapids ranked as one of the healthiest towns for men by Men’s Health Magazine
Named by Christianity Today Magazine as one of the top places for Christians to work in America.
Of course, Grand Rapids isn't the only area where the rent to own is popular. Many properties in Southeast Michigan are being sold in this manner.
There are many reasons why both Michiganders or people who live out of state would want to lease to own homes in Michigan.
Here are some of the biggest advantages to the lease option to buy. This is applicable anywhere, not just in Michigan.
Pros for the Buyer:
Rent Credits -- this means a portion of your monthly lease is credited toward your down payment on the house (another way it can work is that this portion of the monthly lease is deducted from the price of the home when you buy it at the end of the lease term).
Less cash needed to get into the home. Most homeowners have to put down 20% of the house value to avoid PMI (Private Mortgage Insurance) fees, and also have to pay closing costs which can total thousands. If you lease to own a home in Michigan, you'll need to put down a much smaller amount, often anywhere from 3 to 4%, which is sometimes called option consideration, and closing costs will often be paid by the seller.
People with poor credit who can't get a loan from a bank can often lease option to buy a home. This is because there is no bank needed to get into a home, and often the seller will help with financing. The buyer then has time to improve his credit during the duration of the lease and can then get traditional financing if needed later.
You get to try the home out before you buy it. If it turns out you don't like the home and don't want to buy it, you can simply choose to not exercise your lease option when the term expires.
Legal control of the home without owning it yet. You may also often assign your interest to another buyer as long as the seller agrees upfront to this.
Ok, now why would sellers want to lease to own homes in Michigan. Well, there are many advantages in it for them as well.
Some of the biggest ones are...
Get closer to FMV (fair market value) for your home. Try selling your home thru a Realtor in a bad economy for a sum anywhere close to its appraised value. You'll soon find out it's nearly impossible. But with lease options you are tapping into a whole new group of people who want to own homes but can't get the financing they need or will have to pay extremely high interest rates. This allows lease to own homes in Michigan to sell for much closer to their FMW, as these people are willing to pay more.
Better care of your property. This one is really simple to understand. If someone is renting to own your home, chances are much better that they will care for your property as if were their own -- because it will become theirs in the future if they exercise the option to purchase.
Less headache than a landlord because the tenant pays for maintenance on the property, not you.
Longer lease terms (often 2 years or more) and less vacancy. Longer lease terms also benefit the buyer if he or she has credit issues and needs time to improve their score.
Real estate investors, like this author, can also help facilitate lease option transactions. Through our networking and contacts, we locate sellers who are willing to sell their properties on lease option. As long as the sellers are motivated and willing to work on terms, we can work with them. We then put the property under assignable contract....locate a buyer for it, and then assign our interest to the buyer.
Real estate investors have helped thousands of sellers and buyers come together for win/win solutions, and often have the tools necessary for buyers to repair their credit quickly.
If you are looking to lease to own homes in Michigan, we can help.
Wednesday, December 19, 2007
Alternative Financing Options
I want to inform everyone out there that there is alternative financing for people with credit issues, unverifiable income, and low down payment amounts. It is the purpose of this blog to educate people of the options available to them even if they don't qualify for traditional financing. Here in Grand Rapids, MI we are tying this in with our Neighborhood Revitalization project. We have groups of private investors that buy bank owned properties in areas, where some of the homes have been let go, we then renovate them and resell them to people on a "rent to own" basis. Most of these programs require $2-5000 as a down payment, and have set rent amounts. The down payment comes off from your purchase price and reserves the price for when you exercise your option to purchase. If you forfeit your option to purchase for any reason, you forfeit your down payment. Any one interested in finding a property to lease please visit our website at:www.razmusteam.com
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About Me
- Jeremy Noel
- Ravenna, MI, United States
- I am a licensed real estate agent with Platinum Realty. I work with the Razmus Team. My primary goal is to put potential buyers into the 30+ homes that we have available with rent to own financing.
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