Owner-Financing option without the risk of foreclosure

[Yoel Braver]

Hi there,

I am currently investing in single-family properties in Florida and Indiana. I buy, rehab, refi and then I offer these homes under owner-financing terms (i.e. agreement for deed) with a 30 year payoff agreement.... 

The agreement includes a purchase-price schedule where it specifies to the tenant/buyer each month what the purchase price will be which takes in consideration the amount they already paid via the monthly payments.  I do this, to give the tenant/buyer the security that they are not stuck for 30 years and if they happen to get a bank-mortgage they can buy-it off at the specified price. 

According to my lawyer in Florida, if the tenant/buyer defaults on payment there is no way out of foreclosure (I cannot just do an eviction). Because I am conveying an equitable interest in the property to the Buyer/Tenant.   And according to this the same goes if I were to do a rent-to-own agreement.

I would like to ask you, what are my options to create an agreement that satisfies both parties:

Tenant/Buyer: Would like to sign an agreement where they feel safe and see clearly that their monthly payments goes towards owning this property in the future. 

Me: I would like to ensure that in case a tenant/buyer stops paying, I won't have to go through the lengthy and costly process of foreclosure.

What are you thoughts?

Thank you for your help!

Joel

[Timothy Lewman]

@Joel Braver l/o = rto. Never tie monthly payments to the option payment. The rental and l/o should be separate contracts, dont link them. If you need to evict them, they still have the option to buy until the contract expires.