- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Advice on telling tenants to buy or be prepared to move...
Posted on 2/15/16 at 8:07 pm
Posted on 2/15/16 at 8:07 pm
So I'm wanting to sell my rental property. According to Zillow and some nearby sales, I could get $15k in equity selling, and I'm thinking about buying another house.
My tenants have expressed interest in buying the house, but I'm not sure they're ready. I know it's business and that I can't let personal things influence my decisions, but I do want to give them a fair shot. They've been incredible tenants in a situation that I never wanted to be in.
They told me last year that they were wanting to buy the house and then decided they wanted to wait another year. They told me when signing the new lease that they expected to be ready to discuss the price in January 2016. That month's come and gone, and they haven't brought it up. I'm assuming they aren't ready to buy.
Their lease is up in July. I would need to start showing the house soon if I need to find other buyers.
I guess I'm just looking for general advice to make sure I don't screw anything up and offer the tenants the best options for purchasing the house.
My tenants have expressed interest in buying the house, but I'm not sure they're ready. I know it's business and that I can't let personal things influence my decisions, but I do want to give them a fair shot. They've been incredible tenants in a situation that I never wanted to be in.
They told me last year that they were wanting to buy the house and then decided they wanted to wait another year. They told me when signing the new lease that they expected to be ready to discuss the price in January 2016. That month's come and gone, and they haven't brought it up. I'm assuming they aren't ready to buy.
Their lease is up in July. I would need to start showing the house soon if I need to find other buyers.
I guess I'm just looking for general advice to make sure I don't screw anything up and offer the tenants the best options for purchasing the house.
8
Posted on 2/15/16 at 8:18 pm to StringedInstruments
Owner finance it to them.
Sell it for slightly over market value at 8% interest with a 15% down payment. I have one set up with similar terms and I would love to take the house back.
Sell it for slightly over market value at 8% interest with a 15% down payment. I have one set up with similar terms and I would love to take the house back.
Posted on 2/15/16 at 8:30 pm to I Love Bama
quote:
Sell it for slightly over market value at 8% interest with a 15% down payment. I have one set up with similar terms and I would love to take the house back.
Sounds complicated. Any links to help with this?
Would I be able to spend the down payment? I may be in need of purchasing a house in the next year, so I want to have cash in hand to use for a down payment of my own.
Posted on 2/15/16 at 9:10 pm to StringedInstruments
A real estate lawyer could write it up for a few hundred bucks.
I don't see why not, the money is yours.
I don't see why not, the money is yours.
Posted on 2/15/16 at 9:40 pm to StringedInstruments
$15k in equity isn't anything to write home about. Best case scenario you'll be paying the closing costs, even if you happen to find a buyer who doesn't have a realtor.
If they've been incredible and stable, maybe keep the place and continue to rent it to them for as long as they want to. Do you require they sign a couple months in advance for the next year?
If they've been incredible and stable, maybe keep the place and continue to rent it to them for as long as they want to. Do you require they sign a couple months in advance for the next year?
Posted on 2/15/16 at 10:51 pm to I Love Bama
quote:
Sell it for slightly over market value at 8% interest with a 15% down payment. I have one set up with similar terms and I would love to take the house back.
Needs to be careful ownerfinancing if he does not own the house outright (still has a mortgage). I believe a lot of mortgages are required to be paid back when the property transfers and I would imagine a bank wouldn't look too favorably on the original borrower owner financing the house to another individual.
Posted on 2/15/16 at 10:55 pm to TigerDeBaiter
Why's 15k in equity nothing to write home about? Is there a certain amount that is excellent?
Posted on 2/16/16 at 12:19 am to yellowhammer2098
Very true. The due on sale clause is what killed a lot of "wrap mortgage" deals after the late 80's. If he has a conforming mortgage, I can all but guarantee that there's a due on sale clause in the document.
Posted on 2/16/16 at 1:28 am to Paul Allen
Depending on the total value of the house, it's right around the break-even point if he has to end up listing it. (In the event that these people aren't financially ready)
Example: 5% realtor commissions (2.5% each way) @ 200k is $10k and then add in closing cost of approx. $5k. Buyers at this price point usually don't have cash, so it's often asked for. This is just a rough example, and both fees can be reduced or eliminated, but I'd want to build up more equity if I had good reliable renters. Especially if they are the type that will rent until they can buy that house. In a couple years he could perhaps sell to them and avoid commissions.
Just my thought. I got lucky when I sold my house. Listed it on Zillow and sold it to a nice young couple who had an "agent friend". They opted not to use her since I was the one who showed the house. I picked up their closing cost in return with a full price offer. Win, win.
Example: 5% realtor commissions (2.5% each way) @ 200k is $10k and then add in closing cost of approx. $5k. Buyers at this price point usually don't have cash, so it's often asked for. This is just a rough example, and both fees can be reduced or eliminated, but I'd want to build up more equity if I had good reliable renters. Especially if they are the type that will rent until they can buy that house. In a couple years he could perhaps sell to them and avoid commissions.
Just my thought. I got lucky when I sold my house. Listed it on Zillow and sold it to a nice young couple who had an "agent friend". They opted not to use her since I was the one who showed the house. I picked up their closing cost in return with a full price offer. Win, win.
Posted on 2/16/16 at 7:32 am to StringedInstruments
Posted on 2/16/16 at 8:21 am to StringedInstruments
Sell the house with them still leasing. Someone may want the home as a rental investment. With good tenants, it makes it even more attractive.
Posted on 2/16/16 at 8:38 am to StringedInstruments
I've gotten the impression from your posts that you don't wan't to be in the real estate business, that you are only leasing this house because you moved and were unable to sell.
If you want to get out, I think you owe it to them to have a conversation that says, I wish to sell this house, I'm going to list it on the market on X Date, I want you to have first crack at it, let me know.
Who knows, the person who buys it may want to buy it as investment property and keep the tenant.
If you want to get out, I think you owe it to them to have a conversation that says, I wish to sell this house, I'm going to list it on the market on X Date, I want you to have first crack at it, let me know.
Who knows, the person who buys it may want to buy it as investment property and keep the tenant.
Posted on 2/16/16 at 8:41 am to LSUFanHouston
quote:
Who knows, the person who buys it may want to buy it as investment property and keep the tenant.
I agree with this. Tell the tenant that it is going on market and give them an option to buy. Then market the place with "tenant wants to stay" in your info. If you have a long term tenant that wishes to stay, your property is extremely attractive to potential buyers.
Posted on 2/16/16 at 9:27 am to StringedInstruments
Could you do a rent to own?
Posted on 2/16/16 at 9:47 am to LSUFanHouston
quote:
I've gotten the impression from your posts that you don't wan't to be in the real estate business, that you are only leasing this house because you moved and were unable to sell.
If you want to get out, I think you owe it to them to have a conversation that says, I wish to sell this house, I'm going to list it on the market on X Date, I want you to have first crack at it, let me know.
Who knows, the person who buys it may want to buy it as investment property and keep the tenant.
You're exactly right. I have no intention to be in the real estate business.
The house is in an area that has really been on the upswing the past few years, so I'm also hoping to take advantage of that before it starts to plateau or fall.
I've seen some houses online for investment properties. I'll definitely look into that. Would be an easy option if someone had the cash.
Posted on 2/16/16 at 10:31 am to StringedInstruments
They are playing you. They love your place but arent ready to buy or move. I did that to an owner in San Diego. Got me 18mths longer than the owners plans. Landlords and tenants both take kindness for weakness. Its your livelihood and property. 97% buissness. 3% personal
Posted on 2/16/16 at 10:31 am to StringedInstruments
Where is the property?
Posted on 2/16/16 at 10:37 am to Amory Blaine
Alabaster, AL
Posted on 2/16/16 at 12:44 pm to StringedInstruments
quote:
Alabaster, AL
you didn't say it was a trailer
Posted on 2/19/16 at 3:00 pm to StringedInstruments
I'm in basically the exact same boat, but I want to own more rental property, just not this one.
I had 2 neighbors pay around 10K and 1 pay 30K just to be able to sell their houses....I couldn't even begin to fathom that so we rented it out. We have excellent tenants who really take care of the house, but now property values have recovered and we could get a chunk of our money back. I'd like to do so now in case property values tank again like they did a few years ago. There was dramatic, rapid depreciation in our neighborhood.
We wrote a clause into the lease that we could sell at any time, but its way too generous.
I had 2 neighbors pay around 10K and 1 pay 30K just to be able to sell their houses....I couldn't even begin to fathom that so we rented it out. We have excellent tenants who really take care of the house, but now property values have recovered and we could get a chunk of our money back. I'd like to do so now in case property values tank again like they did a few years ago. There was dramatic, rapid depreciation in our neighborhood.
We wrote a clause into the lease that we could sell at any time, but its way too generous.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News