All Forum Posts by: Mike Miller

@Eamonn McElroy

I should also clarify that the handshake and verbal agreement is not that they will or must buy the house. It is only a consent on my part that I will sell it to no other person but them if they so desire in the future. In the meantime, they are only renting.

@Eamonn McElroy

I should also clarify that the handshake and verbal agreement is not that they will or must buy the house. It is only a consent on my part that I will sell it to no other person but them if they so desire in the future.

@Eamonn McElroy

A couple of clarifications:

1- We do not require or accept any option fee or down payment whatsoever. The home is treated as a rental. To move in, the tenant must have first and last months rent and security deposit. Nothing more..

2- What is a non-verbal agreement? That’s what I’m wondering as well. 😂 That was a typo, my bad.. We have a verbal agreement, a handshake agreement, just like the good old days. I have references available for them to verify my integrity, such as past tenants and home buyers. I appreciate the cash flow from renting but have no problem with them buying the house. I connect them with a credit repair company if needed and also with a mortgage broker. Predatory practices are not my modus operandi.

3- As far as I know, my way is compliant with Dodd Frank which is of obvious concern to anybody trying to do “rent to own” lease options.

Thanks for your input!

BiggerPockets does 90% of my coaching.. 😎

I’m a licensed electrical contractor here in NE Ohio and we charge anywhere from $1000-$1800 depending on a certain amount of variables. Most banks are not in love with the Federal Pacific panels for good reason, I’ve heard. If it looks like it’s in decent shape, i.e not corroded or anything, and I could get insurance for the house, I wouldn’t be in a huge rush to replace it.

@Joel S.

Exactly.. Some people on here want you to think it’s either “Go big or go home”.

@Michael Plaks

Thanks, Michael,

A couple of points:

I had every intention of renting until I found out that he may be pre-qualified. At that point, I ran some numbers and decided that it wouldn’t be a bad idea if we could agree on price, etc..

Interestingly enough, I sold a potential rental in the exact same situation a year or two ago. A potential tenant made me an offer I couldn’t resist. My CPA treated that as short-term capital gain. I’m hoping the IRS doesn’t think this is a long-term business plan.

I was under the impression that case precedent has loosely determined that you should at least have the rental property for a year to show the IRS that it’s actually not a disguised “flip”.

@Ned Carey

Thanks, Ned,

Yes, I am taking use of depreciation.

@Natalie Kolodij

Thanks for your thoughts, I always appreciate your practical explanations. To clarify, there is no installment sale or rent credits going on. The house is simply treated as a rental till the occupant buys, which they are under no obligation to do.

Bump.. 😎