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No. of Recommendations: 3
galagan writes:

If I've decided I don't want to live in my home, and I have a choice between renting it out to someone myself, or selling it to you so you can rent it out, then why would I ever sell it to you and give up that profit opportunity?

Because you need the equity in your current house to afford the down payment on your next one, or

Because you want to relocate a considerable distance away and don't want to manage it from long distance, or

Because you want to retire to Del Boca Vista and have decided that carrying a note on the sale of the house will generate hassle-free incme at your advanced age, or

Because you know next to nothing about owning and managing investment real estate and don't want to learn, or

any of a hundreds of other reasons.


Put another way: why would anyone be willing to sell at a price that would make it extremely attractive to a potential landlord?

People do this all the time. It has been said that there are no bad houses, only bad ownerships, and this is very true. Maybe the owners are getting divorced and the a quick sale of the house is the only thing standing in the way of them going their separate ways. Maybe they have run into financial difficulties and are happy to give-away their equity to preserve their credit. The reasons are numerous and varied as people themselves. I've got people willing to pay me more in rent than there mortgage payment would be if they purchased. Why? They like the lifestyle that a single family home represents but are only going to be around a couple of years. We both win.

I bought a house once with owner financing provided at 12.5 %. This is when market interest rates were around 18%. Within a year, the previous owner discounted the loan to me by 20% to get his cash. I didn't ask why he needed the cash. I didn't ask why he was willing to give away 20% of the note value. I didn't care. I certainly didn't sit around convincing myself that I could not make money because his behavior didn't make sense. I simply bought the note and made $7500 for virtually no work.


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