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Author Topic: Lease option out-of-state - Best way to l-o to family member  (Read 9966 times)

Offline todnat

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Lease option out-of-state - Best way to l-o to family member
« on: October 08, 2002, 04:51:26 pm »
My 31 yr old brother lives in Phoenix.  He has lived in an apartment forever and wants to buy a house.  He has no cash for a down payment and has a high debt:income ratio.  His credit score is very high and would be a good tenant.  I want to help him get into his first house by either Lease Optioning to him or Owner Financing.  I obviously want to make money too and have a win-win situation. What would be the best way to start this process (if, at all)?

Offline Admin

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Lease option out-of-state - Best way to l-o to family member
« Reply #1 on: October 09, 2002, 07:11:38 am »
NP,
I assume your brother wants to buy in Phoenix?

If so, why would you want an investment up there?

If so, how familiar with that market are you?

There are numerous variables here.  Can you please provide some more information?  Thanks.

Tim
There's Only Two Things in Life: Reasons and Results.  Reasons don't count.  - Anonymous

Offline todnat

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Lease option out-of-state - Best way to l-o to family member
« Reply #2 on: October 09, 2002, 01:27:07 pm »
Yes, he wants to stay in Phoenix.  I moved from there 2 years ago and had lived there practically all my life, so I'm pretty familiar with the area.  The only reason I would want an investment there is primarily to help him out, and second a tax write off when I go "visit" the property periodically.  The market is good - Phoenix is major urban sprawl, so when you buy on the outskirts for cheap, a couple of years later it's not the outskirts anymore and prices dramatically increase.  Right now he is wanting the north side of Phx in Glendale.

Offline Admin

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Lease option out-of-state - Best way to l-o to family member
« Reply #3 on: October 09, 2002, 03:24:59 pm »
I wouldn't touch this one if it were me.  There's absolutely no way I would do a creative deal with a family member.  I might consider giving them a house, but then again, not with me or someone else being liable for the note.

Are you willing to evict or foreclose him?

How high is his credit score?  His income?  Nowadays, stated income/no doc loans are fairly easy to obtain.  Has he even tried working with a local mortgage broker?

Just my opinion, but if I were you, I'd go looking for properties during visits for your write-offs and find something that way.  Again, I wouldn't mix biz and family and I certainly wouldn't do it in a way intended to be profitable.

Perhaps if you let bro do ALL the work in locating the property he wants and then you assist with the negotiating and financing aspects for a fee?  You could either do it as a favor or charge him an assignment fee, whatever makes you happy.  And you can do this for any type of transaction to include an O/F or L/O type situation.  But I would certainly make sure that I was in and out of the situation so that nothing related to the transaction was still between us.  Just a thought.

You could also try Stacy Orth at http://www.phxhomebuyer.com/contact.htm to see if he can help.  He's a friend and a good guy and may have some suggestions.  Good luck and hopefully, you'll get some other responses.
There's Only Two Things in Life: Reasons and Results.  Reasons don't count.  - Anonymous

Offline Belle

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Lease option out-of-state - Best way to l-o to family member
« Reply #4 on: October 11, 2002, 09:02:48 am »
With good credit scores, your brother could get a loan as an owner-occupied with stated income and still get into the house with little or no money down.  He could probably use the tax advantage himself.
If he goes to a mortgage broker, make sure that he gets the fees settled up front, so he is not paying a lot of JUNK fees that people try to charge.

Offline todnat

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Lease option out-of-state - Best way to l-o to family member
« Reply #5 on: October 12, 2002, 09:35:10 am »
Thank you for your replies - they are both great suggestions!I really appreciate it.

Natalie

 




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