Thread: Renting my house out, but wanting to sell

So I can better help you, I have a few questions for you:

1. Do you have a signed lease with the tenant?
2. Would the tenant qualify for a first-time-home-buyers program in your area?
3. How much do you owe (mortgage balance) on the house and what is it worth (If you don't want to tell me the exact numbers, tell me a %- i.e. you owe 95% of value, or whatever it is)?

I'll be glad to do what I can to help you find a solution! Give me a little more info and we'll see what we can come up with.

-No...the 6 month lease was up in June.
-They would be 1st-time homebuyers (in NJ). They're 3 guys living there as roommates and 1 would be the buyer. They told me they were working to get their money together and we'd talk August 1st but that hasn't happened yet. I'd like to set up at least some sort of timeline so we can all plan our finances but I feel like they're dragging their feet.
-I bought the house for 269K in '04, (it was appraised for the same amount a year ago) and my remaining balance is 240K.

Unfortunately, I don't have any money to put into it.

Thanks in advance for any suggestions you might have!

First, and absolutely most importantly, you MUST MUST MUST get a written lease with the tenants (if you have no contract in writing, you are NOT PROTECTED at all..... I've seen these situations turn ugly so very many times, and unfortunately the landlord AKA YOU, can be held liable for so much.......). Get a new lease signed, make it a month-to-month lease that could be terminated by any party with 30 days notice.

Secondly, you make the timeline that you're comfortable with. Give the tenants notice (in writing) that if you don't have an agreement for their plan to purchase of the home by say September 1st, that you will be putting the home on the market and if purchased, they must vacate the home before closing.

So about selling your home: since the tenants live there and are an interest, they should be your first option (if they can qualify for a loan!). Look into the New Jersey Housing and Mortgage Finance Agency (I don't think I can put links on here, but just google it and you should find it). You find the person that the buyer needs to contact and give them the buyer's phone number (with the buyer's permission to do so), and get the ball rolling!

If the tenant does not qualify for a loan, you could consider a lease option. Is the problem for you the negative cash flow (meaning the rent isn't covering the mortgage) solely, or are you also needing to get the mortgage off of your credit for whatever reason? If it's just the payment issue, would you be willing to do a lease option (let the tenant rent to own)?

If so, you have a few options. You could have the buyer give you a down payment (this is called option consideration, and if for any reason they decide not to purchase or if they stop paying payments, that money is yours to keep and you have no obligation to give it back; you could put this money away as buffer money to help you make the extra payments every month). Then have them give you larger monthly payments, and offer to put a portion toward the equity if they pay on time every month (like $50-$100/mo. would be fair). Then make sure they get advice from the mortgage people about how they can work toward being able to qualify for a loan, hopefully within a year.

If they are not interested or unable to purchase or do a lease option, then put the house on the market and voice that you're open to a lease option, and hopefully that will give you a little edge in this slow market.

Wow, I just realized how long this post is and I apologize! There's just so much to say about this!

Did I answer your questions in my rambling?

Wow...this is great.

The rental lease slid by me this summer but I'll get on it. I just kept thinking, ok, we're going to talk about them buying it soon but, alas...here we are.

I like the lease to own idea. My main reason for pushing this along is so I'm not having to pay money toward the mortgage. (I'm tapped out)

I'll do some research and try to have a talk with my tenants soon. They know I want to get rid of the place and were wondering how we could go about this smoothly and the lease-to-own might help us both.

Thanks so much!!!
s

Been there, done that... I had a house that I "carried" for two years b/c I did not want to put up with tenants tearing it up (they were a horror!), and I did not want to lose my investment.... you have to figure out your long terms goals... you're already in a hole with the house.... do you keep digging deeper or walk away.. i couldn't walk away b/c i loved that little house... my first one, so i carried it.. if you don't want it, sell it at rock bottom... find a realtor who can work a short sale for you... get tough with your tenants... they will leave you in a lurch when convenient for them anyway. Neg. a short sale; in meantime, get tough with your tenants.. if they leave, so be it... you're already in a hole...

Many areas in the country have been hit so hard that the lenders don't want your foreclosure and would rather renegotiate to keep you in the home. maybe if you got your payments lower you would not have negative cash flow every month. This is an example of a company that does it LasVegasLoanMods.com