Qualifying your Lease/Option Tenants

As I gear back up for investment properties in Joplin, Missouri after last weeks connection. I started buiding my contacts. 

I started with Mortgage Brokers simply because I love them and I think they are an amazing asset to your business. I ran through some of the listings cold calling them. I came across one that was very knowledgeable and works with other investors (can you say hello! connect me please).

Her name is Hailey and I explained to her that I will be buying houses and then offering owner financing and that I wanted to work closely with a capable broker that was going to be able to work with the tenant/buyers to qualify out of my high interest rate loans into their own financing. The conversation went really well and she knew exactly what I was talking about which is always refreshing. While I was on the phone with her, she emailed me her pre-qualifying letter to give to the tenants. 

I now felt comfortable with this connection and started calling back the numbers that called about my 'Owner Financing' ad over the weekend. I was able to speak to two of them. 

First one was a lady who is on permanent disability and was looking to get a job at the local Flying J truck stop for $9 an hour. Her husband has been at the same employer for 11 years and is bringing home $11 an hour. They have her elderly mother living with them and their 'grown' 26yr old son as well. They are currently living in a 3/2 townhouse and the bedrooms are upstairs. Her disability is bringing in $790 a month and her current rent is $700. This means that all of her money is tied into rent and they live off of her husbands income for food, utilities and other living expenses on only $11 an hour. 

Her reason for wanting to buy a house is she needs the extra room and the two story living arrangements don't work well with her disability. I understand that.

Next one was a gentleman who is currently owner financing a house from his father. It's a 2/1 and he's married with a child so he just wants a larger house and he's looking for a 3/1. He was a former corporate rat that was downsized and until then, he was doing just fine. He currently owns two small franchises in town and brings in a decent income, however due to his job loss earlier this year, his savings depleted and his bills stacked up. He's on the upswing now and can afford to pay a higher interest rate and has some savings built up but can't quite qualify for a traditional loan due to the recent events.

I explained to both prospective tenants that this will be a Lease with the Option to buy. They will have a total of 24 months to exercise their option to purchase. I told them that they will be working directly with a mortgage broker (Hailey) to improve their credit to obtain a traditional loan at a better interest rate for them. I told them that during their tenancy their, I would be reporting their on-time payments to credit reporting agencies that will improve their credit but they were expected to stay involved and active with the mortgage broker to obtain a traditional loan. 

Which of these two do you think will qualify for a lease and qualify for a traditional loan in a short amount of time with some help by having positive marks being reported and with the guidance of an experienced mortgage broker?