Sell & Rent Back Schemes?

[jimmygu3]

This is an idea I have had for awhile, and it appears to be fairly popular in the UK. It's a deal in which a company buys a person's house, generally for 15%-30% below market value, then agrees to rent it back to the previous owner. Rentback.org is one of them.

I know there may be disreputable companies out there that use these schemes to buy homes cheap and then evict the tenant, but it seems like in certain instances it could be a win-win. If a homeowner's mortgage resets to a higher rate and they are unable to qualify for a better loan, they may be better off letting a company with access to cheaper credit carry the mortgage and just pay rent. None of the neighbors would even need to know! It would have to be someone with some equity, but the inability to tap that equity. Assuming you started one of these companies at the bottom in real estate, it could be very lucrative while keeping people in their homes.

Any thoughts? Are there laws against this in the US? Why is it so popular in the UK and not here?

Jimmy

[zoog]

Re: Sell & Rent Back Schemes?

This is an idea I have had for awhile, and it appears to be fairly popular in the UK. It's a deal in which a company buys a person's house, generally for 15%-30% below market value, then agrees to rent it back to the previous owner. Rentback.org is one of them.

I know there may be disreputable companies out there that use these schemes to buy homes cheap and then evict the tenant, but it seems like in certain instances it could be a win-win. If a homeowner's mortgage resets to a higher rate and they are unable to qualify for a better loan, they may be better off letting a company with access to cheaper credit carry the mortgage and just pay rent. None of the neighbors would even need to know! It would have to be someone with some equity, but the inability to tap that equity. Assuming you started one of these companies at the bottom in real estate, it could be very lucrative while keeping people in their homes.

Any thoughts? Are there laws against this in the US? Why is it so popular in the UK and not here?

Jimmy

Well, first of all, it would seem that if the company is going to buy a house for 15-30% below market value (and what market value?, I might add), the soon-to-be-rentbacker would need at least 15-30% equity in the home to not go underwater on the deal. For the company, the rent they get would have to more than cover the cost of buying the home. There are many areas where monthly rents are still well below monthly mortgage payments.

A couple local Craigslist posts of desperation along those lines:

$365000 Atwater Investor Needed (South Waterfront)

Looking for an investor for my lovely condo in the Atwater Place. Would love to rent back from the investor. Have lived in the unit for 5 months and it is fabulous.

The unit is in the Garden Home portion not the tower and overlooks the gathering gardens of the John Ross. It is 935 sq ft 1 bedroom, 1 bath unit with custom closets from Portland Closets.

If interested please respond and I would love to share more information with you.

$615000 I need someone to buy my property

I need someone to buy my property and sell it back to me with affordable payments. We have a newly remodled house on approx 30 acres. We bought our home with one of those ARMs and refied too early. Our payments are way too high and we are at risk of loosing everything. Our mortgage is 5200.00 per month with the interest rate we are paying. We can only afford about 3000.00 per month. If you or someone you know has good credit and would like to make a profit at the end of this deal, please let us know. We would be willing to pay up to 675,000.00.

Yeah, you know, real estate only goes up.:rolleyes: