Don’t Do MN Foreclosure Leasebacks
This article is written by Mario and agent that does specalize with mn short sale homes
Dont do the lease back for two reasons:
1) depending on your state laws it is sometimes very risk for the buyer
to do it and not come across as a preditor. I live in MN and we have
so many stupid laws to protect people but at the same time it is because
some people take advantage of and screw people that are already down
and out. In our state it is Very hard to do a foreclosure bailout
legally and usually not even worth it because they regulate how much you can
charge in interest and term and reapercussions and even how much more
you can sell it back to them for that it just takes the money out of it
and lets the seller/tenant walk all over you if they choose. Now
remember it’s not like someone is looking over your shoulder to make sure you
are doing it legally but at the same time all it takes is a
seller/tenant with a victom mentality to turn around and say that you were using
preditory tactics to steal their house and you have a mess on your
hands.
2)If they are that far behind right now with their BANK then why would
they hesitate to not pay you when they know you will make the mortgage
payment either way because it effects you. Now i am also not telling
you that the seller/tenant deliberately didnt make their mortgage payment
but there is a reason lenders look at credit reports… it shows thier
track history and the level of risk a lender is taking when giving
them a line of credit. You need to pay attention to the persons history.
if he is still in the same line of work and has no other form of income,
it is simply a matter of time before this person hits the same
financial situation again but this time you are the “bank” and you are the
jerk that has to evict them from their own house.
Lease backs are very risky and i have friends that did them for a while
and will never do them again because of the amount of times that
people they were trying to help turned around and screwed them and stayed in
the house as long as they could to make the situation even harder on
the investor.
Do it right and buy it outright from him and if you want to deal with a
tenant, put one in that has a good track record of paying thier bills.
that is y it is so important to ask them what their plan is if they
are not going to sell, because that is most likely their only option
besides foreclosure.
Ron did a longer more detailed article at this link for minnesota short sale
