Posted by Tony Colella on May 20, 2010 at 07:43:39:
Na, just another investor trying to feed his family, no Guru but lots of black and blue marks to show my time in the game I guess.
First let me re-state that I have kept all my homes as rentals so my opinions of lease/optioning the homes is just an opinion and you would be best served by responses from folks actively doing lease/options (perhaps Ernest Tew style) and even better if they are from your state.
In Asheville, NC where my properties are, the local small claims court handles evictions quite easily. Until recently it is my understanding that lease/option folks have used the 2 document (separating lease from option) approach but the magistrate who tries the cases has caught on and at any mention of such an option kicks the case out and forces the landlord to refile in General District Court. I do not believe this is the practice state wide but it may be growing.
General District Court may be a bit more expensive and formal but this does not mean you won’t be able to evict. In Virginia where I started my Lonnie deals, all of my evictions went through General District Court so it wasn’t any big deal.
I do not know how General District court will treat the 2 document argument or any assertion by the tenant/buyer that they have equitable interest in the property (although few if any probably will show up or make the argument).
I say this only as a warning and not to deter you or anyone from using this approach. I just want everyone to run the full course of due diligence to make certain they can get the home and land back promptly. Too many folks write me saying they have tried this approach or that approach and now find that they have no idea how to navigate their court system to get the property back. This leads to the tenants staying longer, doing more damage and burning the investor out. It is the investor?s job to know how to respond to these eventualities. If/when the deal goes up in flames, we must know where the fire escape is. Never allow the tenant to know more about the law and procedure in your county, than you do is my point.