Experience with rent-to-own companies like Hyperion and Mack? (Homewood, Huntley: for sale, 2013) - Chicago Suburbs - Illinois (IL) - City-Data Forum

Cinema · 06-09-2013, 05:41 PM

Has anyone had any experience with the rent-to-own companies like Mack Companies and Hyperion Homes? I've done some searches (BBB, reviews, complaints, etc.). Not really finding much, don't know if that's good or bad. We're looking for a single-family rental in Homewood.

Housing Market · 07-10-2013, 05:26 PM

I just tried to do a deal for one of my clients with Hyperion in Huntley. The rent Hyperion offered was about $300-$400 over market value per month. The explanation that I got was that once Hyperion buys the house, they would not be able to get any of the property tax exemptions that individuals get, so the higher taxes have to be built-in to their rent. It sounds ok, but no landlord is allowed those exemptions, yet others are willing to charge less.

In the right situation, Hyperion may be a good option, but, as with anything else, go in with your eyes wide open.

Cinema · 07-10-2013, 11:01 PM

Thanks for your reply and input. We're working with them right now, but not having much luck, houses seem to go under contract before they're even listed!!! And though this isn't our preferred method of purchasing, it's our only option right now. But it seems like anything listed at our maximum purchase price takes us higher than the maximum rent they approved us for.

thehappygrl · 11-14-2013, 01:13 PM

This thread was started in 2007 but I am replying in 2013 for future readers. I just completed the application process with Hyperion. PLEASE do yourself a favor and stay away. After supplying a ton of documentation, after meeting ALL their requirements, I was turned down for ambiguous reasons, at best. I turned around and found a mortgage broker willing to work with me and line me up a traditional loan but not until after hurting my credit score with a hard inquiry through Hyperion, learning they would tack on $10-20,000 to the price of the home I would have bought through them, and more. If your credit score is border line, do yourself a favor, look into rent to own, owner financing, or just rent until your score improves... Hyperion is just not work it to move quicker and sooner. Wish I'd learned this before letting them knock my credit score down a few points. At least, I found a home I am moving into under a rent to own agreement with the owner. After a few months of renting, the mortgage broker has a loan that will purchase the home outright from the owner. There are more options out there... look for them!

Cinema · 12-02-2013, 10:34 PM

Quote:

Originally Posted by thehappygrl

This thread was started in 2007 but I am replying in 2013 for future readers.

Hi Happygirl, you're looking at the date I joined the forum, I actually started the thread in June. Thanks for your input, glad it all worked out for you.

Cinema · 12-02-2013, 11:00 PM

Thanks for everyone's input. We actually went through 2 offers/1 contract, each time there was a problem. Either they low-balled the sellers or didn't want to pay for additional repairs that the sellers didn't want to pay for, even when it was still feasible for us to afford the rent at the additional costs.

Some houses were above our rental maximum because of the taxes, but at the same time, there were houses that were higher that we could afford because the taxes were based on senior exemptions. That's all fine and well, but those exemptions weren't going to apply to us but they didn't even bother to see what the current taxes would be without the exemption. I actually had to call the assessors office myself and do the research. So when were they going to tell us the $2,000 grandma paid in taxes was going to be $8,000 for us!!!!

We also sent in a deposit overnight on a house that accepted their offer, then I never got any updates, took their sweet time about telling us the sellers had accepted. Know how I found out we weren't going to close? I continued to look at listings (just in case) and saw the house we were supposed to close on in 3 weeks had been re-listed!!

It does seem like a great concept, and I believe it CAN be if you're going for a foreclosure, short sale, etc., and can get a really good deal. But the only way they do foreclosures is if it will bring your rent to at least $1,000, so you're not really getting a good deal if you're looking for anything under $80,000 but needs less than $20,000 worth of work (or whatever that would come out to). They might mean well, but in the end, it's a business looking to make a profit. I get that, but it just felt like everything wasn't upfront and I would have appreciated them more if they tell you from jump that they're adding on $200-$400 more per month. At least give the client the option of paying it or not.

Thanks again to all for the replies.

doodlemagic · 12-05-2013, 04:21 PM

rent to own is basically no good unless your in a situation where you maybe work sales an need another 6 months or year to show a 2 years of solid income and will be getting a traditional mortgage a short time later but want to get into the house.

basically if you have to go the rent to own avenue you probably shouldn't be buying a home in the first place. thats why the deals heavily favor the seller. there's really no one way to do rent to own, all setups are diff. generally the home is sold at the top of market value if not above market value, rents are above market value with a very small percentage going to a future downpayment or towards principal of the home.

i would advice to start saving money, get your finances in order and buy the traditional way

doodlemagic · 12-05-2013, 04:23 PM

i agree these deals are somewhat predatory, however there's a reason banks wont give traditional mortgages to people who want to rent to own. if those people still want to buy a home they are going to pay a premium for that. same way with my business if i need a loan i can go to a hard money lender and pay 15%, thats crazy interest for a biz loan but if its my only option and i want the money i gotta do it. where there's risk people will pay a premium. generally its the buyers fault they accept these deals. nobody holds a gun to their head. they want to buy now and dont want to wait to dig themselves out of a hole they got themselves into so they are going to pay for it.

brimacd83 · 02-04-2014, 04:13 PM

Hey Gang, I am a Realtor in Colorado and I have closed 4 homes under the Hyperion Homes program in the last 6 months. I hate to see all this negative chatter when I can tell you that this program works well and it is a great option for people who are either working out of a credit issue or who have started a new job and don't have 2 years of 'verifiable income'. This program gives people the security of knowing they don't have to move again and a path forward to home ownership.

Sure, there are challenges. I have experienced virtually every single challenge mentioned on this thread of conversation but I've learned to work through the issues so that my clients never feel the rub. The rents are only slightly higher (~3-5%) than market rates. I believe this is very fair given the risk Hyperion is taking and the security the resident is getting - a 5 YEAR AGREEMENT with only 1 year lock-ins! That is great security against the landlord suddenly putting your home up for sale and giving you 30 days notice to move out.

You've heard the nightmares about lease-to-owns where after putting in years of rent/equity the owner won't sell it to the renter, right?! Won't happen in this program. The client gets a guaranteed buyout agreement for the full 5 years. Buy it out at any time for pre-agreed prices...OR NOT!! Their choice. Sure the prices increase each year to keep pace with anticipated inflation. That is fair.

Everything about this program is FAIR and I think that is a reasonable expectation for anyone who is in a difficult credit situation and needs to consider using it. I can tell you that my clients are grateful they found it and I am continuing to promote this program i my business. I believe in it and know it helps people. (For the record, I'm a Realtor and I don't work for Hyperion. In case it helps my credibility, I'm a West Point Graduate and I don't lie, cheat or steal and I've told the straight truth here. Call me if you want to hear more - Brian MacDonald, 303-915-6126.)

Cinema · 02-18-2014, 08:52 PM

Hi All. I just wanted to come back and update everyone who was so helpful in responding to my post and give a little pep talk to anyone who is in our situation. For the record, I still would not recommend Hyperion to anyone in our situation. You know what, I take that back, I would "tell" them about the program but I would also share our experience which wasn't positive. As I originally said, the houses that fell within our rental price were houses I wouldn't want to live in on a short term basis let alone purchase. If those added costs/fees (on top of the taxes) weren't included our options would have been greater. And I'm aware that what you get for the money also depends on the area you're looking. Again, if it works for some people, than more power to them, just wasn't right for us.

That being said, I found a FANTASTIC lender who worked with us, really guided us on the best ways to raise our credit scores and encouraged us not to give up (seems like every time we did the right things, the scores didn't move, or worse fell!!). Also our issue was FICO because we have the finances and that's what was so frustrating. Long-short, we finally got the FICO where it needed to be (and beyond!) and got pre-qualifed just this month (insert Snoopy happy dance here). As you can see from my original post, it took about 8 months. I wasn't a happy camper that I couldn't get my kids into a better district with the start of the 2013-14 school year, but I came to terms with that. The bad part is they had kind of a crappy 8th grade, but the good part is they're getting through it and will still get to graduate with their friends since elementary school.

I have to say house hunting is now a joy instead of something to dread. Being able to look at the houses we could never consider through Hyperion was truly worth the wait. And the same realtor we originally worked with is almost as happy as we are because she knew she could only show us houses that really didn't suit our needs (or wants). The difference between our maximum house cost with Hyperion (based on list price and taxes) and being able to purchase on our own is close to $70,000 more house. And even the mortgage of the higher priced homes is coming in under or equal to what the Hyperion rent would have been.

Again, I won't knock the program because I'm sure it does work for some, but if you can hold off and try to do it on your own, I say be patient and get a home you'll love, not settle for.