Ryan Scott

As we all know there can be huge consequences for someone who undergoes a foreclosure. These consequences include but are not limited to the following:

• Damage to your credit rating for many years;
• Higher credit card interest, higher car loan interest, and even the denial of credit for many years to come;
• A Possible IRS tax lien due to the foreclosed property that the bank had to short sale;
• Deficiency Judgments on the owner filed by the bank to recoup their losses;
• Ongoing mental stress and embarrassment for the owner and his/her family.

In addition, your cost of borrowing becomes much more expensive due to the higher risk created by the lower credit scores. So while foreclosure my seem to be the best solution in these troubled economic times it will create many longer term problems and should be avoided if at all possible!

One helpful solution is using a creative financing strategy which has been around for many years but becomes very popular during troubled economic times. The reason it works so well is that it’s win-win transaction that allows both parties to benefit. This strategy which is called Lease Option or Rent To Own in it simplest form is a standard leasing agreement between a tenant-buyer and a seller. However, the tenant-buyer has an option to purchase the property at a predetermined price within a predetermined time frame which is typically 10-24 months.

The seller is legally required to sell the house should the tenant-buyer execute the option. In exchange for the rights to purchase the tenant buyer must give the seller a deposit sometimes called an "option consideration". This Option Consideration non-refundable is usually 3%, 5%, or in some cases 10% of the purchase price. On a $100,000 home that’s $3,000, $5000, or $10,000. that you will get before your tenant-buyer moves in. There is no magic formula for the percentage set. The seller sets it at what the tenant-buyers can afford as long as it also satisfies what the seller needs to get to satify his needs. Remember its Win-Win. The option consideration does also go toward the purchase price once the tenant-buyer gets their bank financing in 1-24 months to finalize the purchase and pay off the seller. Again… the option consideration belongs to the seller who can use it anyway he or she wants, which includes catching up back mortgage payments to save the home.

Today as a full time investor, I generate the majority of my income from my real estate transactions helping deserving tenant-buyers. With 100’s of successful creative financing transactions that I’ve completed by selling my properties and by helping other homeowners and realtors, I can assure you that the Lease Option&Rent-To-Own format, if done properly, is safe, easy and it works!

So if you’re facing foreclosure there are options if you simply open up your mind, be a little flexible and create a win-win opportunity for a motivated deserving buyer who also will be more than willing to help you.

Be faithful and I pray the Lord blesses you with success in your quest.


Jim G.

www.SafeRentToOwn.com

Ps.If you have any questions or if I can help in any way feel free to post a comment.

In every city across the country, that are stats showing a direct correlation between % of homes owned, and % of the population affected by things such as crime, poverty, sub-par education, unemployment, sub-par health, high vacancy rates, etc.

Obviously, there is no simple way to solve these problems that are affecting so many inner-city neighborhoods, as there is clearly multiple factors causing the problem.

However, when my home city in Upstate NY recently published it's City-Wide Housing study, it became very clear to me that in neighborhoods where the majority of homes are owned by out-of-state investors, crime and sub-par living standards run rampant.

Note: a good tool I like to use to see these types of stats nation-wide is www.bestplaces.net

After speaking to our city council-member about the issue, I learned that the top city officials were already well-aware of the dilemma. He also pointed out that Pride in Ownership leads to houses that are better maintained, and increasing property values. Unfortunately, many of the people that live in these neighborhoods have rented their entire lives, their mothers and fathers had always rented, and their grandparents were life-long renters.

Home Ownership simply isn't a conceivable option for them. Not because they don't deserve, can't afford it, or don't want too... in my experience the inability for them to buy for themselves is caused primarily by a lack of role-models, lack of financial education, and a lack of professional resources to assist them.

Believe me, I see first-hand how MOTIVATED some of these people are to buy homes (at least initially) before they are told "NO, NO, NO" time and again by agents, banks, etc. Due to lack of financial education, many of the people in these types of neighborhoods have bad or no credit at all, and have never learned the importance of savings and investments.

However, in America, we pride ourselves on being the "land of opportunity" and for good reason. In this great country of ours, rags-to-riches stories are commonplace, and anyone can be successful with the right resources.

That is why any good Rent-to-Own program MUST be partnered with a system for helping these people get a good financial education, including credit repair counseling.

With the right resources in place, we can positively impact these communities by turning the population of life-long renters, into responsible home-owners. With pride in ownership of one's home, comes pride in ownership in one's community. Some of our Rent-to-Own buyers have gone on to become active members in neighborhood associations, block clubs, and local religious organizations. All of them, learn about the importance of, and how to better maintain their properties.

The goal to clean up our inner-city neighborhoods is one that we must not lose sight of. Rent to Own is indeed a great option for Sellers/Investors (especially during this crazy credit crunch) but it's also important to realize the impact we can have the Buyers and the Communities (remember: win-win-win!!).

Fixing the problems of our inner-cities won't be an easy task, and it won't happen overnight. However, good Rent-to-Own programs CAN allow us to make an impact, one house, and one street, and one neighborhood, at a time!

For more information on structuring Rent-to-Own Transactions that are easy, safe, and are a benefit to the community, please visit www.SafeRentToOwn.com