Posted by Bill Gatten on April 05, 2000 at 17:05:19:
Lease optioning can be a good, of course, but you might want to consider shielding the process with a land trust. And make sure the tenant isn’t afforded an equitable interest (e.g., options should be by separate agreement, though they can still claim that they have such interest and potentially bog down an eviction process).
As far as Owner Financing is concerned, simply beware (as much as possible) of these issues:
Undue exposure to the other party’s potential for creditor and tax liens and/or marital dispute or BK issues (not to mention probate) that could negatively affect you (e.g., his being on title and you being on the loan).
And, of course, there’s always the DOS issue if the property is financed…but not a big deal, if the payments are always prompt (or just made at all all in most cases).
Be sure that you arrange payment processes, so that you are not relying on the buyer to make YOUR loan payments on time (you can have them pay by cashier’s check and forward it to you for payment with a faxed notification to them). You can always submit a Request for Notice of Default, but that could prove a red flag for the lender, if you had a particularly nasty one.