I have been looking into various funding strategies for investing in the USA as now seems to be a good time to buy, but my cash on hand for a deposit is slim right now.
My question to those in the industry is, would purchasing a property using wrapping (rent to own really) work if there was an option to sub-let in the agreement. eg: i enter into a rent to buy agreement then rent the place on the market to cover my costs with the deal eventually paying for itself.
Would this work? would anyone agree to it ? any pitfalls ? any other interesting tips to further improve on this idea ?
I'd be interested to hear what people think.
Hi Pat
Are you thinking of using the Rent to Own process (Lease with an Option) to buy the property in the USA?
If you can get directly to the seller an negotiate with them it may be worth your while. It isn't too difficult to get a sub-lease clause.
It's probably not a good idea to buy a RTO off a vendor financier if you're planning to make the property a buy & hold. This is because the vendor financier will normally have marked the property up to full market price, or just over full market price, to get his/her profit.
Negotiating with the seller can be a drawn out process, so this may cause some difficulty with your USA idea. However the same strategy can be also used in Australia.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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