Buy Lease back

In the "buy lease back" scam, the person offers to buy the property and then lease it back to you. This is probably the most common scam going. Don't get me wrong there are legitimate investors helping people with this buy lease back technique. However, many things can go wrong with this technique and there are just too many opportunities for the person to take advantage of you.

For one, the price at which it's going to be sold back to you is going to be higher. If you're having problems making the current payment, how would you be able to make the higher one. A case when it might work is when you have a lot of equity in your house. Another might be when the investor can do a short sale, which means with the lender's permission he buys the house for less than you owe on it.

Second, let's say you sell it to the investor and begin making rental payments. What happens if you make a payment late? Is the investor going to evict you as if you were a renter or will you get a little bit of slack to get back on your feet. If the investor just wants your house, he'll use any little excuse to evict you.

How about if the investor charges you rent, but doesn't make the mortgage payments. This would be the worst scenario, you'd be making payments, but still get foreclosed on.

Finally, you may not be able to improve your credit score enough to buy the house back. This is usually the case when you've fallen way behind on your mortgage.

Questions you'll need to ask to determine if this is a legitimate investor are:What will be the price at which I will buy this house back?What happens if I make a late payment?Will I need to go to a lender to get a loan when it's time to buy?What if I cannot improve my credit score? How am I going to buy the house back?

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