Recently did a BRRR and was approached about a rent to own

[Yeshua Williams]

I'm just curious if anyone has run into this situation? Basically my renter of the BRRR property wants to do rent to own, never been asked, and not entirely against it. Any thoughts? Does it trigger due on sale?

Thanks

[Dale K Poyser]

Quote from @Madison Wilson:

Interesting! I have yet to run across a rent to own experience. I find it very intriguing for buyers that otherwise have trouble qualifying for a traditional mortgage. That is where the concern would come in, is vetting your tenant/buyer to be trustworthy to not default on payments. I am not sure if your mortgage company allows loan assumption, or your loan program specifically, but it could be a safer option if so. I would definitely take your time to research and continue to gather information from others who have tried it first hand, to see if it seems like a good option for you. Also, there could be no harm done if a lender could give them an idea of what they would qualify for traditionally, to see if it matches your property criteria/value. 

@Madison the tenant would not be getting a deed to the property until they purchase.  So the due on sale clause would not apply.  They would be treated like a regular renter and all risks associated with having a renter would apply. You might be think of "subject to" where the buyer would get the deed to the property but the mortgage stays in the owner's name.