Is there a strategy where I can sell my tenant my home he is renting when he doesn't have a down payment. Such as the home is worth $500k, normally 20k would go to realtors if selling, I'd be left with $480k, which I am fine with... can I give him that $20k equity somehow? is there a trick? My advisor says the money has to be sitting in his bank account, not equity given... but is there a way? without doing a long rent to own?

Yes it is called rent to own, or RTO.

You decide the down payment, ideally not 0 but 3-5% and a portion of the monthly rent goes towards the eventual deposit when buying time rolls around on a year or 3.

Rent ant then gets his own new mortgage plus his accumulated deposit.

On top of it you can gift him some money if you want.

Hi,
Yes of course there are different ways to structure such a deal.
The bigger question is why sell when you can refinance and take out about the same amount of money?
If you sell, the buyer will benefit from the next 10 years appreciation.
If you don't sell, you will benefit from the next 10 years appreciation.
Thanks

RE123RE said:

Hi,
Yes of course there are different ways to structure such a deal.
The bigger question is why sell when you can refinance and take out about the same amount of money?
If you sell, the buyer will benefit from the next 10 years appreciation.
If you don't sell, you will benefit from the next 10 years appreciation.
Thanks

Click to expand...

Want to re invest where property prices go up instead of down... Property is in Edmonton, bought it in 2006 for 585k, worth 485k in 2016, looking like it will be flat or even go down more over the next 5 more years... held onto this rotten banana for too long... Alberta is dead. whereas BC is much stronger, and I can manage it myself.

joe123 said:

Want to re invest where property prices go up instead of down... Property is in Edmonton, bought it in 2006 for 585k, worth 485k in 2016, looking like it will be flat or even go down more over the next 5 more years... held onto this rotten banana for too long... Alberta is dead. whereas BC is much stronger, and I can manage it myself.

Click to expand...

Hi,
I understand your history with this property.
The question was not why buy in BC but rather why sell in Edmonton if you can take out the same amount and buy in BC without selling?
An answer I would understand better is the amount of time and effort your Edmonton property requires from you. If this is the case, maybe improving your mgmt. is the solution. Just not sure even in a pretty flat Edmonton market you are going to lose money by keeping it. Also, reminding past negative appreciation does not mean similar trend in the future.
Thanks

You can sell on Agreement for Sale with no money down. Barry McGuire (and company) are teaching an all-day workshop on AFS in Calgary on June 18th. You may want to consider attending.

While I have bought several properties on AFS with zero down, I would NEVER sell to a tenant with less than 20% down. Reason for the double-standard? I know I'll do what I say I'm going to do, and I can't say the same about the population in general.

I agree with Sherilynn, I would not do the deal without having the tenant having skin in the game. You have too much to lose and he has nothing if you allow him to get in with no money down. I strongly believe that when people have money in a deal it is less likely that they will fail. If they do fail and do not complete then at least you have some money and it wasn't a complete loss. I would be very cautious.