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August 12, 2006


Bonnie Erickson

August 13, 2006

I'm in total agreement with you, Judi. That's why I said if it looks too good to be true, it probably is. Waiting 6 months to clean up credit and using that extra money that the investor is collecting to save for a down payment, closing costs, or to clear up some credit issues is a much better scenario in most cases. I know of a couple savvy investors who sell on rent to own and wait and hope for the buyer to be delinquent so they can sell to another culprit and collect another big down payment. I also know a few legitimate rent to own investors who see this as an opportunity to sell their house and avoid paying large capital gains tax. It truly is a buyer beware scenario which is why a REALTOR is a good place to go for advice.

Judi Brooks

August 13, 2006

This scenario is in many cases a scam. Savvy investor\'s preying upon buyers with sub-prime credit or other issues. Shame on them! Savvy Investor holds all the cards (and the Buyer\'s money) and the Buyer holds all the risk. Savvy Investor can rest easy knowing the property will be well taken care of (they are buying it after all). Savvy Investor knows there is a high likelihood that the Buyer\'s credit won\'t improve by the end of the contract. Savvy Investor will typically ask more than market value for the property, making the purchase a bad investment for the Buyer. Savvy Investor may have added default clauses (in fine print) to the contract which might render it null and void at term when Buyer has the option to exercise the right to purchase. My advice to anyone thinking about such a lease option is find a good Realtor! A good Realtor knows a good Banker (or twelve) that will help with whatever issues that need clearing up. A good Realtor knows the market. Thus protecting the buyer from making a bad investment.

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