So, what are the pitfalls with this transaction? It may fit seller and buyer needs if all works out as predicted by both parties.

It's a significant purchase - Bay St. Louis. Intended second home/retirement home. New construction - 2 years. Seller intends to build a new home in a different location in the area. I'm thinking of leasing back to him while he builds. Lease-back will cover my note, tax, insurance for the duration. Thinking out loud - crazy?

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Posted by LSUFanHouston

NOLA

Member since Jul 2009

37081 posts

Posted on 3/4/16 at 12:26 pm to ynlvr

I'm guessing seller needs to get the note off his credit report in order to get financed for new house?

Lease backs to give the seller time to move are pretty common. Have a clear understand of the length of the lease, and who is responsible for what. Collect a deposit, etc.

it's really no different than any other rental transaction.

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Posted by ynlvr

Rocket City

Member since Feb 2009

4587 posts

Posted on 3/4/16 at 12:39 pm to LSUFanHouston

Thanks. That's the way I was looking at it.

I really don't need the place right now, but I love the house and location. Price is right. Gives me time to close out other real estate I'd like to unload in the meantime. I'm hoping he needs up to 18 months.

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Posted by Tigersfan

Member since Feb 2006

2639 posts

Posted on 3/4/16 at 1:58 pm to ynlvr

I sold a house a few years ago while I was building another and did something similar. We built the rent into the accepted sale price and just delayed the close by 4 months. The sellers got a great deal on the house thus lowering their property taxes and I didn't have to uproot my family during the building process. Only people that probably weren't to happy we're the neighbors as im sure they would have liked to have the higher comp. But we were only talking about 10 grand so it really wasn't a big deal and I doubt they even know we structured it like that

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