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Old 04-21-2010, 09:51 AM
 
Location: NW San Antonio (near Hausman and Babcock)
237 posts, read 400,787 times
Reputation: 230
Default Experience with Lease to Purchase Option Real Estate Investor

Howdy,

(I posted a similar thread in the San Antonio forum but since this investor also does business in Austin, and I used to live up there, I am putting it on the Austin forum as well for input).

I had put my house up for rent on Craigslist and was contacted by a real estate investor up in Lockhart, TX, called "Ayres Real Estate Investors". Website is below. I was wondering if anyone has had any experience with this company, seller or buyer. Basically it is a lease to purchase option, they find a renter to rent out your home, with the option to purchase after 2 years or so, with no commission fee (they collect all of the fees from the buyer).

It sounds like a good deal and they have a "B" rating with the BBB, I spoke with an actual person and he said it was family owned and he was pleasant to deal with. We are trying to rent out our home to move to Oklahoma and this sounds like a good option. Any advice would be appreciated. Or in general, has anyone done a lease to purchase option on their home before with any other company and how did it work out for you?

(Not sure if links are approved, I am just putting it here so people can give some input).

www.ayresrealestateinvestors.com
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Old 04-21-2010, 10:15 AM
 
Location: Austin, TX
6,822 posts, read 10,501,172 times
Reputation: 2906
In a typical lease purchase, there would be some part of the payment (above the market rent) that would go towards a down payment at the time of purchase. If the buyer backs out, you'd keep that "option" money. How much are they proposing to collect for you?

Also, with them finding the renter/buyer... what is in it for them (the company)? They say you pay no fees, but they have to make their money some way. Do they take a portion of the first months rent, like a property manager or listing agent?

Finally, since it is them finding your renter, I'd be VERY wary of their screening process. Remember, it's basically YOU that has everything on the line, should the renters fail to pay (and you have to evict) or damage the property or get hurt and sue you. You'd be becoming a landlord, with all the good and bad that comes with it. Screening is very important, and the types that are looking for lease-purchase situations often have bad credit.

I guess I'd also want to hire a real estate lawyer to draw up the paperwork, just like with any lease purchase, even if it is through this company.
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Old 04-22-2010, 08:53 PM
 
Location: Collin County
92 posts, read 167,173 times
Reputation: 32
No,No,No...stay away from Lease Purchases! Save your money, build your credit back ..then buy a home of your choice!
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Old 04-23-2010, 10:26 AM
 
Location: Austin
4,320 posts, read 7,926,712 times
Reputation: 3376
In Texas, a lease purchase agreement must be drawn up by an attorney. REALTORS® are not allowed to write this up as it's considered practicing law with combining multiple contracts into one transaction.

It sounds fishy to me if there is no "Fee"... who pays for the attorney?
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Old 04-23-2010, 10:55 AM
 
Location: Austin, TX
14,316 posts, read 20,082,323 times
Reputation: 6342
Seems full of pitfalls to me. If you end up with a bad tenant and have to evict, what happens to the "option" money, and will you be sued by the "Investor"?

No fee? Actually there is, they will be taking part of your rental income and purchase price to manage this for you, while they take no risk themselves. There is value in having a local real estate management company manage the rental for you since you will be out of town, but this company is located in Lockhart, I don't consider that local for San Antonio.
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Old 04-23-2010, 05:39 PM
 
2 posts, read 3,775 times
Reputation: 11
I'm pretty sure it's going to go down like this. The numbers are obviously examples.

Ayres will lease the house from you with an option to purchase for 2 years. They offer to pay you $500/mo and option to purchase the house at end of 2 years for $100,000. The keyword is option since they could choose not to purchase at end of option period. Depending on how it's negotiated, they may ask for part of the $500 to be applied to downpayment at closing. They probably will not want to put down any option money either. At least I didn't when I use to do real estate investment.

Ayres will find a tenant/buyer to live in your house. They will lease it to them for $700 with $2000 option money. They will give them the option to buy the house for 1 year for $110,000. If the tenant doesn't buy at end of year, they can either renegotiate with Ayres or move and forfeit the $2000 option money they paid. Ayres can start over with a new tenant and option money.

That's how Ayre's will make their money. They get the option money plus the difference in rent amounts. They are not managing the property for you; they're your tenant. At the end of 2 years they can just walk away 8-10 thousand dollars in their pocket if they can't find someone to buy your house.

If you're going to do this, make sure you ask for references from some of their past clients. I would also require some option money down. That way, they have something invested in the property. If they don't buy, they forfeit the option money.
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Old 04-28-2010, 06:58 PM
 
Location: NW San Antonio (near Hausman and Babcock)
237 posts, read 400,787 times
Reputation: 230
An update on this (thank you all for your advice!) I sent an e-mail to the company (Ayres) asking for references and documentation showing that they were a legitimate business, and the reply I got back from the owner was basically this, "Wow, you're making things harder than they really are". He proceeded to tell me that he would NOT bring any of the documents that I had requested proving that they were a legitimate business.

So I guess dwildcat is pretty spot on with his assessment. I replied to the owner that if they were legitimate and professional and really wanted business then it wouldn't be too difficult for them to prove their legitimacy.

Thanks again for your advice! There is wisdom in the counsel of many!
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Old 01-31-2011, 04:57 PM
 
1 posts, read 2,194 times
Reputation: 10
I have dealt with them. They "purchase option the home from the seller." The buyer pays them the option fee and never gets it back an it does not go towards the down payment of the home. Although, when they are talking to you, they will tell you it does, but it does not when you read all the contracts. They also have a disclosure paper for all parties to sign that states they are investors and not real estate agents and are not representing anyone but themselves in the arrangement. As far as I know, they do not get any of the rent as it is paid directly to the seller. Once they get their option money, they are finished with the deal.

I know this from experience. Don't use them.
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Old 09-23-2011, 05:00 PM
 
1 posts, read 1,622 times
Reputation: 10
Quote:
Originally Posted by ineedslipknot View Post
I have dealt with them. They "purchase option the home from the seller." The buyer pays them the option fee and never gets it back an it does not go towards the down payment of the home. Although, when they are talking to you, they will tell you it does, but it does not when you read all the contracts. They also have a disclosure paper for all parties to sign that states they are investors and not real estate agents and are not representing anyone but themselves in the arrangement. As far as I know, they do not get any of the rent as it is paid directly to the seller. Once they get their option money, they are finished with the deal.

I know this from experience. Don't use them.
I am trying to find them, I wanted to ask about the money we had given them. It sounded like it was for a "down payment" for when we are ready to buy. Their office phone is disconnected and the cell number is never answered. I guess this is one of those things if its to good to be true it is. If any one knows their correct number please let me know.
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