Rent to Own primary residence, bad cred and no down payment

[Susan Authement]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $88,000
Cash invested: $10,000

Rent to Own Contract .
Purchase price : 88K.
Down Payment : 200.00/Month Installment plan over 4 yrs .
Details: 775.00 Monthly rent + 200.00 down payment installment over 4 yrs gave me a 10,000.00 down payment and 4 yrs of home appreciation.

What made you interested in investing in this type of deal?

After a divorce late in life ruined my credit i was unable to obtain a financing to purchase a home. I was in danger of becoming homeless. I placed an ad online asking if anyone would sell me their home with seller financing or rent to own with no down payment. I needed time to recover and found someone who had a job transfer who could not sell home quick enough.

How did you find this deal and how did you negotiate it?

I placed an ad online locally asking people to present their offers to me for owner financing and rent to own properties.

How did you finance this deal?

I had owner/seller financing in the contract if i was unable to obtain a mortgage when we closed later in 4 yrs.

How did you add value to the deal?

Luck :-)
Home appreciation over time and simple repairs such as flooring and painting.

What was the outcome?

Entered contract 4 yrs ago with purchase price of 88K, in process of closing now with a value of 168K to 178 K

4 yrs of on time payment history using online auto payments provided a huge boost to my credit score.
Credit Score raised to 660+ plus (from so low i refuse to state it here. )
The good 660+ Credit score allowed me to qualify for both a conventional loan and VA Home loan.
I am currently waiting to close the VA loan on the house in a couple weeks.
Completed the following minor repair

Lessons learned? Challenges?

I was very lucky the owners/sellers were honest people. I made several glaring mistakes with the contract wording etc that could have bit me in the *** or allowed the owner to walk away with my down payment at the end of the contract and not sell me the house. A quality contract and understanding of what needs to be included and knowing how it should be worded is crucial in a rent to own or owner/seller financing contract.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

NO. Had/having a bad experience with agents currently. Not going into more detail until the purchase is complete and not naming names/companies at this moment while still working with them. Communication and clarity are important when working with agents. Lack of can lead to customers feeling negative about the experience etc....

[Doug Spence]

@Susan Authement Congrats!! And thank you for sharing your success story. Your post is a great example of how folks can get creative in challenging situations to achieve their goals. Most people would have just given up and said "well I can't qualify for a mortgage so I guess I can't buy a house" but you didn't give up! 

I especially like the way you posted an ad for exactly what you needed. 

Now that you have much-improved credit and some equity, are you going to pursue another property so you can rent this one out? 

Thanks again for sharing.