Would you give an Immigrrant Tenant a 30 year lease on a house? And a Deed?

Question

If you live in an area that has non-English-speaking tenantsIf you live in an area that has non-English-speaking tenants, especially Hispanics like where I live in California, and I can only imagine Arizona or New Mexico or Texas or New Orleans (I know Cajuns) in many parts of New York City,People that have English as 2nd language are very careful about their housing, they're more motivated than the average tenant to pay you on time. They don't like legal problems and they usually keep up the property better.They can deal with business (rent payment)  matters better, because they are  cash basis are cautious about bank loans because they are on cash basis so much.How can you be creative and help an immigrant be a homeowner?And you make money as a landlord?A long-term lease option might be the trick.  Give someone a lease for 12 months with extensions, and keep extending the lease.  You can give them a 12 month option and keep renewing the option.  You can say to them:I know you love the house and you want to own it.If you make payments on this property for long period time I will help you get the deed.There will be slight rent increases over time, but this way you can be a homeowner and get the deed.Now if you are a honest person and want to help people, this might be a good idea to get long-term rentals and even be a long-distance landlord.The tenants can pay you cash deposits into a bank every month, you give them bank deposit slips.Every 6 months to 12 months combined look at the property if you're out of the area, and on the anniversary date let them know how many more years they got to go to the deed.I know everybody wants to get a free and clear property and buy-and-hold, but you get a good cash flow out of the property, after expenses, you might want to consider this is a way to help immigrants.  And not have any turnover.

Micki M. · Answer

I would very carefully review the fair housing federal and local laws before opening up a discussion with this kind of terminology in it, let along basing leases or contracts on your view of a certain type of person.

Account Closed · Answer

Just for the record, I'm a non-English speaking tenant from New York City (actually I speak 2 languages besides English fluently) - I wouldn't mind someone giving me a house!

I'm not sure what the euphemism "non-English speaking tenants" means but if the OP is referring to illegal immigrants who would not otherwise be able to buy a home or qualify for financing (maybe they don't have a SSN or they don't have tax and credit history)?

There may be other laws besides Dodd-Frank that need to be taken into consideration when doing a handshake deal like this.

Josh Caldwell · Answer

Immigrants have some problem with financing, even the legal ones.   They dont have credit histories and in many cases they dont have a verifiable work history.

If you are looking to sell to them and protect yourself then all you need to do is create two documents.

First you need a lease that makes the tenant buyer responsible for all repairs, taxes, and insurance, and pretty much everything that an owner would be required to do to keep the property up. This lease removes you from the landlord world.

Secondly you need an option that will allow your tenant to purchase the property on an amortized purchase scale.  The amort table that you use will look like a wrap around mortgage but all it does is that it adjusts the cash out purchase price each month.   The title stays in your name to protect you as the seller.  Then if they default, you evict them rather than foreclose upon them.

The document is dodd-frank compliant because you will set your purchase at 30 years.   If you are doing a bunch of these sales, you will need to create a bunch of entities.  You can sell on terms 3 times per entity.  Now the dodd-frank law didnt articulate what an entity is exactly.  I have talked to lawyers who believe that a trust is an entity for dodd-frank purpose.  I am not so sure, and I wouldn't want to be the test case, where this grey area will be litigated.

I hope this helps

To your success

Josh

Jeff Rabinowitz · Answer

If you are saying that after a year of payments that the tenants/buyers are closer to owning the home then you are not leasing the home you are selling it to them with financing. It doesn't matter that your agreement says lease on it.  What matters is how a judge or the CFPB will interpret your agreement if the buyer ends up leaving before they own the house and decide to sell the house to recover the  equitable interest which you have conveyed or to sue you to recover the equitable interest if you block the sale. I hope your agreements are compliant with Dodd-Frank.

Brian Gibbons · Answer

No Account Closed just a long term lease w option to a legal citizen but someone that pays cash for everything and no credit

Account Closed · Answer

@Brian Gibbons

So are you going to give me an apartment??

Ryan Dossey · Answer

@Brian Gibbons I think I understand what you are saying. Basically if they stay long enough you "give" the house to them? Are you charger market rent or a little over? How do you have it worded? At the point of sale how would you transfer deed? What "sale price"? etc.

This doesn't seem "predatory" to me at all. Now if he was talking about how you can charge them 2x FMV and charge ridiculous interest sure. But I don't think that is at all what he is advocating for.

Jeff Rabinowitz · Answer

It seems like you are targeting people with poor English skills and those who are not comfortable with traditional financial systems for your deals which may not be in compliance with Dodd-Frank. That is almost the definition of predatory lending. The CFPB has promised aggressive enforcement against predatory lenders.

Brian Gibbons · Answer

@Jeff Rabinowitz

@Sergio Garcia

Yes an RMLO can look at the total income to debt ratio and credit (usually little) and make the call, as per Dodd Frank and the Ability to Repay Rule.

What I am talking about is a lease that has long term renewals, but 1 year at a time.

Sergio Garcia · Answer

Is that not a lease with the option to buy? Which they pay you addition to the monthly rent.

Would you give an Immigrrant Tenant a 30 year lease on a house? And a Deed?

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