Need $ For Deals?
Get Unlimited Funding
Click Here Now!

--------------------------
Hard Money Lenders
You Need To Be Listed
Click Here Now!


Welcome, Guest. Please login or register.
Did you miss your activation email?
June 21, 2018, 01:58:11 AM
Home Help Search Calendar Login Register
Free Monthly Update
Name:
Email:
Need $ For Deals?
Get Unlimited Funding
Click Here Now!

--------------------------
Hard Money Lenders
You Need To Be Listed
Click Here Now!


Welcome, Guest. Please login or register.
Did you miss your activation email?
June 21, 2018, 01:58:11 AM
Home Help Search Calendar Login Register
Free Monthly Update
Name:
Email:
Click Here to Register for the Discussion Forums

Author Topic: L/O Credit Applied to Down, or Purchase price. Which is Best  (Read 6642 times)

Offline Strongwills

  • Member
  • *
  • Posts: 5
  • Karma: +0/-0
L/O Credit Applied to Down, or Purchase price. Which is Best
« on: December 27, 2002, 09:24:53 AM »
I have heard that some investors on their Lease/Option deals allows a percentage of the lease payments (Rent Credit, Option consideration, etc) to be applied as part of your down payment. On the deals that I have done, I have always told the T/B that their rent credit would be subtracted from the purchase price. My thought is that most T/B's would prefer the rent credit be applied as part of the down payment.

Is it a big deal with most Mortgage Brokers to apply the rent credit as part, or all of the down payment when the T/B gets their own loan?

Thanks,
Andrew

Offline Admin

  • Administrator
  • Member
  • *****
  • Posts: 1049
  • Karma: +0/-0
L/O Credit Applied to Down, or Purchase price. Which is Best
« Reply #1 on: December 27, 2002, 09:58:19 AM »
Andrew,
What I usually do is explain that I don't know how the lender will allow the funds to be applied.  Some may allow it as a down payment, others may not.  I simply tell the TBer that we will structure the transaction however the lender requires to ensure they do get credit for those funds.

I haven't run across it yet, but I have heard of lenders rejecting or decreasing rent credits because the amount was too large.  What I've been told (for example) is that offering more than $200 per month on a $1,000 payment could cause problems.  Whether or not that's true I don't know, but it makes sense to me.

Yes, the TBer would always want the credits applied toward out-of-pocket costs as opposed to a price reduction, but that's out of our control.

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

Offline Terry (Houston)

  • Member
  • *
  • Posts: 10
  • Karma: +0/-0
    • http://www.SellYourHouseQuick.com
L/O Credit Applied to Down, or Purchase price. Which is Best
« Reply #2 on: January 05, 2003, 02:41:39 PM »
I have always been able to get the Option Consideration placed as the "down payment" when cashed out with a new loan from the buyers.

I don't do a whole lot of L/O where I give rent credits, though I did do one with $100 a month.  THat was before I learned not to say anything about a rent credit.

There was no issue with the $100 being taken off of the sales price, in that case.

Terry (Houston)

Offline Strongwills

  • Member
  • *
  • Posts: 5
  • Karma: +0/-0
L/O Credit Applied to Down, or Purchase price. Which is Best
« Reply #3 on: January 07, 2003, 03:45:28 PM »
Thanks Tim and Terry for the replys.

Terry- If you are not giving rent credit to your T/Bs, then are you just giving them a option to buy at a set price?

Thanks,
Andrew

Offline Terry (Houston)

  • Member
  • *
  • Posts: 10
  • Karma: +0/-0
    • http://www.SellYourHouseQuick.com
L/O Credit Applied to Down, or Purchase price. Which is Best
« Reply #4 on: January 07, 2003, 05:10:36 PM »
That is about it. Just the option to buy. I may give one if someone smart asks for it.  But that does not happen too much.

Make sure that the money you give is a part of your asking price.

Good luck

Terry

 




SMF 2.0.15 | SMF © 2017, Simple Machines