Selling property TO your tenants???

[Jeremy S.]

hello everyone,

My wife and I just purchased our first 2 rental properties for about $20k each from the same distressed seller. They are both currently rented for $750/month to tenants who seem to be taking care of the places and my intention was to hold these properties as long term rentals but, when they asked me about paying rent ahead 3 months with tax return money, it got me thinking. What if I could get them to purchase the properties from me for $50k and use that tax return money as a down payment on an FHA loan? I would offer to pay all closing cost involved. My agent is going to make a cost sheet for me to present to them that would show they could have a mortgage payment of around $350 if they purchased my properties.

My questions are:

1) is there any way I can go about making sure they will be approved for the loans before I bother presenting them with my idea?

2) what kind of inspections will need to be done for an FHA loan as they are not in the greatest condition?

3) how can I make sure they will appraise for $50k and be FHA approved?

4) if they do not choose to purchase them, will they in turn be upset knowing that my carrying cost (as they see it) is only $350 leaving me with huge profits?

PS. These are the only properties we own other than our personal home and we bought the rentals outright with cash so I have no mortgage.

I thank you in advance for any advice.