Credit problems can lead to many other problems not limited to difficulty purchasing vehicles, opening checking accounts, getting jobs and purchasing or renting a home. When it comes to the very American dream of owning a home of one’s own, experiencing credit problems hope seems like a long lost commodity. For those who wants to get their lives back, there is a good news that there are some savvy investors who are willing to take the risk on those who have had credit problems. Credit problems will make your credit card can not be used for a while. It takes time to recover. There are so many processes that fill with pitfalls and missteps along the way.
For this reason alone, the investor that offer lease to own real estate to those with less than spectacular credit are often viewed as saviors. They are taking a risk that others are unwilling to take. But many would find find that they are justified. Cause they are charging a higher price or interest rate than traditional lending institutions will charge. At the end, that is all their money on the line the lessee decides to default on the contract. If there is any repair that will be needed, then it is also their money that will be required if eviction becomes a necessary conclusion.
Investing in this kind of case is is one way of making that system work in investors favor especially if they are interested in “buy and hold” investing. Buyer usually will find another property after a couple of years and will have essentially rented the property for a specified amount of time. Once they have been able to straighten out their credit situations, they will seek alternative financing. There are many occasions when the property is returned to the investor,
There is more than one way for a lease to own deal. The most common lease is 2-5 years years in which those leassees of the property can live in the property with the monthly lease being applied towards a down payment for the property once they are able to get traditional financing. The odds of them being approved for a loan is greatly improved if twenty percent down payment is achieved. Combining this opportunity with serious efforts to improve their credit scores then there should be no problem achieving this.
For the real estate investor, this kind of situation is so more attractive than renters for many reasons. First, the maintenance will be the lessees’ problems not you. Then you have renters that are hoping to have have ownership of the property in time. Last, in order to cover the money being applied to the down payment on the property, you can charge a little more each month for rent.