What are my options for home owner who wants to stay in house?

[Ben Hughes]

So I have a home owner who has a conventional loan for there house. The husband lost his job 16 months ago and just now started a new higher earning job here in the oil and gas business. They have no problem making current payments but are too behind to catch up in the banks eyes. Now they are behind on payments but do not want to move out as they consider this there home until they die. They have kids in school and love the district they are in. Ok, so they have contacted me on what there options are on private financing or owner finance. I've never had this situation come up and I'm sure several on here have. Would I be crazy to buy the house from them and then let them stay in the house? Or are there other options which I'm not thinking of?

[Jon Holdman]

You're their knight on a white horse now. Soon enough you'll be the wicked landlord or the theiving investor that stole their house.

Rent has to be MUCH higher than the payment for a rental to be profitable. The owner will likely expect you to buy the house then rent it back to them for your new PITI. Or, to sell it to them with an owner carried mortgage at bank interest rates.

If they want to stay in the house they need to figure out how to either keep their current mortgage in place or refinance and get a new mortgage. Given their history of back payments, the latter option may be tough.