New Firm Offers Texans A Rent To Own Option On Houses

New Firm Offers Texans A Rent To Own Option On Houses

A new company getting started with deals in the Dallas area is pairing property investment funds with potential homebuyers.
 
HomeLPC targets consumers who are locked out of the home market but still want to own the roof over their heads.

The company, which recently launched in Texas, allows renters to lease to own a house, which is bought and paid for by investors in the firm.

New York-based HomeLPC plans to serve consumers who can’t qualify for home financing but are good credit risks.

The renter — who must make a substantial upfront payment — has the option to purchase the property in three years.

Most of the houses are valued between $150,000 and $400,000.

“We are trying to serve the aspiring homebuying market — people who want to buy homes but cannot because of the change in mortgage standards,” said CEO and founder Raymond Mikulich. “They get a fixed rent for three years and the option to buy the house at our cost plus 50 percent of the appreciation.”

The initial payment the renter makes of 8 percent to 12 percent of the home value will count toward the home purchase price.

HomeLPC relies on the prospective buyer to find the property and handle maintenance during the lease period. That saves the company costs typical investors must absorb.

“We make money — this is not a not-for-profit organization,” said Mikulich, who previously was an executive with Apollo Global Real Estate North America and Lehman Brothers. “We are in the business of helping people get in a home and making some money along the way.”

Mikulich said his new company has already done a handful of transactions in the Dallas area and has about another dozen in the works.

“We are hoping to do a hundred houses by the end of the year in Dallas and Houston,” he said.

Independent Dallas financial planner Tom Murphy said the lease with an option to buy program is a way for some consumers to get a house if they can’t otherwise acquire the property.

“It could be the only available option for some prospective homebuyers,” Murphy said. “But it’s not free, and there are catches.”

If the tenant can’t swing an outright purchase of the house before the option expires, HomeLPC gets the upfront money. The residents will get to continue renting the property.

“Think of rent to own as similar to owner financing — it’s done for the same reasons,” Murphy said.

Follow Steve Brown on Twitter at @SteveBrownDMN.

Story obtained from:
http://www.dallasnews.com/business/residential-real-estate/20140619-new-firm-offers-texans-a-rent-to...
By STEVE BROWN STEVE BROWN 
The Dallas Morning News Real Estate Editor 
[email protected] 
Published: 19 June 2014 09:53 PM U
pdated: 19 June 2014 10:11 PM 


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