Can I sell my house and rent it back?
What should I know before I sell my house to rent it back?
What else do can I do to avoid foreclosure?
Most of us love our homes and don’t want to leave. So it sounds good when someone offers us instant cash and says we can stay on as renters. These companies do seem to solve a lot of problems:
However, the picture isn’t as rosy as it seems. For each of these good points, there are downsides to match.
The first issue is that this sort of buyer is looking for a deal. You would get more just selling your house on the open market.
Secondly, in most cases you can’t buy your house back. Read the fine print and you will discover how difficult it will really be to buy your house back. Their marketing copy is unrealistic.
You will go from being an owner to a renter, so instead of a mortgage, you’ll now be paying rent. Also consider that the company gets to choose what it wants to charge. You may find yourself paying as much or more in rent as you ever did for a mortgage, except now that money’s going to a hedge fund instead of your nest egg.
Finally, even if you can afford the monthly rent, the company may not let you stay in the house as long as you want. They may decide they want to sell it. It’s up to them if they want to rent to you.
What is really going on behind the scenes with rent-back schemes or wholesalers is that the wholesaler enters an agreement with the pre-foreclosure seller, markets the property, and then assigns the deal to a flipper or someone who will rent it. The house will sell for below market value, and the pre-foreclosure owner might make 3-5K and the wholesaler will take 20 or 30K in equity that the owner had built up. It is a scheme to take advantage of desperate or uninformed people.
Why a “Fresh Start” with bankruptcy is better:
Bankruptcy is a legal protection given to you by the government, and was created to help exactly people like you who’ve been hit by difficult circumstances.
By filing bankruptcy, you will get an “automatic stay,” which prevents banks from foreclosing on you for the time being. You will have time to get your affairs in order and make plans to go forward.
If you file a Chapter 13, you and your creditors can come up with a debt repayment plan that will have you continuing to pay manageable amounts to your creditors. This will allow you to stay in your home and give you 3-5 years to catch up on back payments.
Want to learn more? Read the full article below, or, contact us for your FREE Consultation, $0 Down, with Easy Payments.
Yes you can, but learn about these four downsides before you sell. During the 2008 foreclosure crisis, nearly 10 million Americans lost their homes. And
What if your landlord tries to evict you even though there’s an eviction moratorium? When will the moratorium be over? What else do you need
*Bona Fide Bankruptcy Attorneys, P.L.L.C. practices bankruptcy law and is considered a debt relief agency by federal law. We help people file for bankruptcy relief under the Bankruptcy Code.