My landlord will creatively sell me the rental I’m in. I need advice!!! - Posted by Chris
Posted by Chris on June 03, 2000 at 10:58:57:
I have lived in a rental in San Diego for the last 2 years and my lease is up for renewal. I asked my landlord if he would be interested in selling me the house. To my surprise, he said that he would be willing to do it if I am willing to do a creative financing deal. He gave me a brief explanation of how it works but I’m having a little trouble following the concept. Here is the basic idea.
He told me that after we agree on a selling price, I would give him a down payment (this locks in the selling price). For the next 2 years I would continue to rent the property. I would put the utilities in his name but I would continue to pay them. Then at the end of 2 years we would put the property through escrow and transfer the title over to me. He would then carry the note at an interest rate of 7.5% monthly. He wants to do it this way because he says for the 2 years I continue to pay rent, this property will be considered a second home for him. That way when the title is transfered, he won’t have to pay capital gains on the sale.
Has anybody ever heard of or used this kind of deal either as a buyer or a seller? What are the benifits and pitfalls of doing it this way? Is this a good deal for me the buyer? What else should I know and what should I look out for when setting up the deal? How do I make sure I don’t get ripped off?
I appreciate any advice you could give me. Thanks!!