Better than Sale & Rent-Back?

[Guy M.]

I am sitting here spinning a bunch of ideas. I thought I'd come on here and put one of them on blast...

Sale & Rent-back

So, with the sale & rent-back, a buyer would purchase a property and rent it back to the original owners for a period of time. I can see how this would help people that need time to move their belongings and maybe find another place to move into.

But I don't see how this would work if a seller is distressed and really needs to offload the house because they can no longer make the payments or they are behind on payments. If they can't afford the monthly mortgage payment, then they can't afford a rent payment that is just as high or higher.

Better than Sale & Rent-back?

Does it make sense to purchase a rent-ready property subject-to for the amount a seller is behind on payments (and use that purchase payment to bring the seller's mortgage current), give the seller a, let's say, 5-year option to purchase, and rent the property out to someone else for a few years up to 5 years when the original seller is ready to buy back the title?

The way I see it there are some risks such as the seller incurring liens on the property during that 5-year period. Also, the market rent will have to be high enough to justify me taking over payments.

Any other thoughts?