#DIVVY CRUNCHBASE HOW TO#
#DIVVY CRUNCHBASE PLUS#

Negotiated lower than 250k, or lower monthly payments with the seller. Depending on how Divvy structures their end of the deal, they may have. Plus, there has been some mortgage pay down, and in most markets, that 250k house has appreciated to maybe 270k of value.

Then there's the monthly spread, Divvy will also get about 300/mo over the 3 year lease (another 10k) If they are offering credit of 100/mo they'll just raise the purchase price another 3600 to 'reduce' with your credits ov the 3 years. So 265k, less 15k leaves 250k - exactly what the seller wanted. The option fee looks like a down payment, but is just the upfront cost for Divvy to do the negotiations. Divvy then comes back to you (potential buyer) and says, 'Great news! We negotiated a lease to own with the seller!'ġ5k down (approx 5%, usually called an option fee) The seller gets a steady 3 years tenant and an offer for sale price in their range.

#DIVVY CRUNCHBASE PLUS#

And we'll guarantee you rents of 'x' (Let's pretend rents in this area are normally 2500) this gives the seller their necessary mortgage payment plus taxes and insurance and a small spread of maybe $250/mo of profit. Seller, we'd love to offer you 250k,but we need to lease it for 2 or 3 years. A typical offer would be something like, 'hey mr. Divvy or an LO representative approaches the seller with an offer. Seller is asking 250k for a decent house and maybe not getting offers in that range. So, applying that general concept to the LO model: (which is basically playing middleman) In the early years, most of every payment is interest and the ratio eventually flips to be applied to principal in the tail end. That's the 'cost' of the bank putting up the money for you to play house for 30 years. So a regular mortgage on a 250k property at current rates (around 4%) with the minimum 3-5% down depending on program would cost about 1200/month against the principal and interest (plus taxes and insurance, but we will leave those out for this example) over 30 years, that house costs 435k,so roughly 185k in interest. (FYI, some states have limits on these rates) Effectively like charging 50% or more interest. That puts the total cost up at around 2400-2600 for the same couch. In a rent to own scenario, they might drop an ad for the same 1200 couch as weekly payments of 25/wk or 100/mo. Example: 1200 couch (cash price) Some people might put on a credit card (let's pretend high interest at around 24%) so with the principal and interest, you might pay about 75/month for 24 months, effectively paying close to 1800 for the 1200 couch. The payments themselves are somewhat reasonable for many people, but the total cost of ownership is marked up quite a bit.

They sell a couch or a computer for weekly or monthly payments. On a small scale, think of rentAcenter or Aaron's. So the basic concept of rent to own is for buyers whom may have issues qualifying traditionally for a mortgage, need some time to clean up their credit or financial situation, or to drop a solid track record on the future residential mortgage loan office (RMLO) I call it LO (lease option) because its technically a lease, with an option to buy. Rent to own, lease to own, rent to buy, lease option, etc. Can't speak for that firm specifically but the concept can work for many people.

You will pay more than traditional, but it's a program for people who can't/don't want to go the traditional route.ĭepends. Here, please treat others with respect, stay on-topic, and avoid self-promotion.Īlways do your own research before acting on any information or advice that you read on Reddit.

#DIVVY CRUNCHBASE HOW TO#

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