Author: Toni Husbands / Source: Wise Bread
George Arnold bought his Chicago bungalow in 2009. This fixer-upper needed a lot of TLC, but was in a good neighborhood. He’d found a diamond in the rough. Arnold set to work bringing the home back to life through a series of major renovation projects. Soon after, his mother’s health took a turn for the worse.
“I kept my mother out of the nursing home for two years before she passed away,” he recalls. His devotion to his mother is admirable — but it caused him to fall behind on bills.
To avoid losing the home and all the money he’d invested, Arnold agreed to sell his home to an investor. He’ll rent it from that investor for two years with the option to purchase the home again at a fair market price.
Losing your home to a foreclosure or tax sale is not the only option for struggling homeowners. A short sale lease-back allows a homeowner to sell their home and lease it back from the new buyer, forming a landlord-tenant relationship that lasts for the term of the lease.
There are several ways to get a short sale lease-back on your home. We’ll discuss three below.
Investor short sale lease-back
Struggling homeowners might be able to save their homes by selling the home to an investor before the foreclosure. Investors looking for rental property profit from the steady income and potential discounted purchase price. The short sale will have to be approved through your lending institution. Once approved, the homeowner can avoid a credit-crushing foreclosure, rebuild their credit in the ensuing years, and stay in the home.
At some point in the future, the previous homeowner and investor can negotiate a fair sale price. This allows the homeowner…
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