Why rent when you can own in Orange County California? Great question! If you're looking for Orange County houses for rent you may want to consider your other options as a potential homeowner in the Orange County area.
Most locals who are looking for homes to rent in Orange County are likely looking at renting as their only option because of things like…
- Bad credit (and can't get a traditional bank loan to purchase a home)
- Not enough funds for a large downpayment on the Orange County home you want to live in
- … or you're just used to renting and didn't know there were other options.
If you haven't heard of "renting to own" a home (some call it a "lease option"), you're not alone.
But the "rent to own" concept isn't new.
In fact, renting to own has become really common for many things, including furniture, electronics, cars, and more.
And the rent to own concept for houses has been around for decades as well.
You can check out more info here on our website to learn more about renting to own a Orange County home… but in basic terms a rent to own home is…
… Simply a home where the owner of the house allows you to rent the house, with an option at the end of the rental term to purchase the house at a price you and the owner agree upon ahead of time.
You're not obligated to purchase the home… but the seller is obligated to sell you the home at that pre-determined price if you choose to purchase it at the end of the rental term.
There are a few big benefits to Orange County rent to own home programs like ours that can help many Orange County area residents to become homeowners.
Usually, there's something causing people to choose to rent over buying.
If your credit is preventing you from getting a bank loan to buy a home, a rent to own program can give you the time and assistance to improve your credit during the rental term… so at the end of the rental term, you can hopefully qualify for a bank loan and buy the home!
Or for many people, the issue is the downpayment. If you just don't have the money you'd need to put down on the house you'd want to live in… many times you can find rent to own programs with houses in the exact neighborhoods you want to live in… with much much lower move in fees… and even sometimes guidance in helping you build up the down payment needed during the rental term in the rent to own agreement.
In the end, if you're looking for Orange County houses for rent… before you go and rent another house you may want to explore our Orange County Rent to Own Program to see if it's right for you.
Renting to own isn't for everyone… but if it's the best fit for you this could be your chance to get out of the "rental rat race" and into a home of your own that you actually eventually own.
For more information on our local Rent To Own Home (lease option) program submit the form on the top right of this page, or give us a call anytime at (949) 625-4533.
So, you're looking for a place to rent in Orange County?
As you've already seen… there are a lot of options in the Orange County area for housing.
All the way from apartments in Orange County to rental houses in Orange County… condos… mobile homes, and more.
But if you're struggling to decide if you want to rent an apartment or a house… check out our tips below on the "pros and cons" of renting a local apartment vs. the pros and cons of renting a local house. (also, see our blog post on pros and cons of Rent to Own Programs for more detailed info >)
There are lots of great apartments in Orange County.
You've probably found new apartment complexes with all kinds of amenities like a swimming pool, gym, rec area, and all kinds of other perks.
And you've probably come across some bare-bones apartments that just gave you 4 walls and not much else.
So here are some Pros for renting local apartments:
Here are some Cons of renting local apartments:
- You have neighbors sharing walls with you (sometimes on 3 sides of you)
- The stairs: If you get an upstairs apartment it can be a pain getting your furniture in and out
- Parking lot dings: If you've lived in a large apartment complex where you're parking in a shared parking lot… you've likely experienced a ding or two from your neighbors on your car.
- Usually, you don't get a yard that is just for you (if you do, it's usually very very small)
Here are some Pros for renting local houses:
Here are some Cons for renting local houses:
In the end, I can't say that local Orange County apartments are better than houses to rent or not.
It's really down to your preference of what you want.
If you want more space and room to roam (without having to share walls with neighbors)… then renting a house will be the route you want to go.
If you're looking for lots of options, a lower price, and extra amenities like a pool… take a look at the local apartments.
Or, the 3rd option for you is a local Orange County rent to own home program.
Check out this page on our website that walks you through what a rent to own home (lease option) home is.
If you're interested in seeing the local Orange County rent to own homes that are available click the link below to get on the list and see available homes.
Or call us at (949) 625-4533 anytime to ask us questions and see if our Orange County Rent To Own Program is right for you!
This question comes up again and again… and honestly, the answer this question has changed in recent years based on new laws enacted that affect what a home owner can do when they're selling their house under a rent to own agreement.
One of the big benefits of owning a house is that you (hopefully) earn equity as you make payments and pay down the mortgage.
One thing many home owners don't take into account is that really during the first 5 years (or more) the majority of your mortgage payment to the bank is interest… and very little of your payments for the first 5 years actually goes to pay down the principal and earn you equity.
But on the flip side, the 2nd half of your mortgage is usually where the majority of your equity is earned since most of those payments go to the principal.
When you do a lease option / rent to own home in Orange County there are various types of arrangements you can choose to take… but the most common is this:
In the old days of lease options / rent to own agreements, a home owner was allowed to let a portion of the monthly rental payment be applied to the purchase price as a pre-paid down payment.
This was great for everyone!
It helped the tenant buyer earn money off of the purchase each month they made a payment… and it helped the house owner sell the house more often at the end of the rent to own agreement since now the tenant had some "equity" in the deal.
But in recent years a bill was passed in Washington D.C. called the Dodd Frank Act that has placed restrictions on rent to own programs… and has limited the ability to apply rental payments to the end purchase of the home.
One of the great benefits of renting to own a Orange County house is that you get the ability to have the home seller agree to sell you the house for a price you agree upon today.
And the beauty is… if the market does really well during your rental term and the house goes up in value a lot… the seller can't raise the price on you.
So whatever home value growth happened during your rental term over and above the sales price… that's your equity!
No, but just make sure that when you're negotiating the rent to own agreement that you really do a bit of research and see if the area the house is in has a good chance of increasing in value or not. Then base the purchase option price on that.
Before we wrap this article up… you may have the question of whether you HAVE TO buy the house at the end of the rental term.
The answer is no. If you decide you just don't want to (or can't) buy the house at the end of the rent to own agreement… you can just continue to rent if the owner will allow it or you can leave. You're not bound to purchase the house. However, the seller is bound to sell you the home at the predetermined price as long as you followed the contract terms (i.e. - you didn't miss payments, you weren't evicted from the house because of a breach of the rental agreement, etc. etc.).
If you're looking to get more info about our local Orange County Rent To Own Homes Program… simply give us a phone call at (949) 625-4533 or fill out the form on this website to see our current LIST OF AVAILABLE RENT TO OWN HOMES here >>
A really common question and concern from people looking at renting to own a Orange County house is "are you required to buy the house in a rent to own home contract ?" at the end of the rental term.
As an example…
… lets say you found a great Orange County rent to own home and agreed on an attractive rent to own agreement (lease option) with the seller that looked like this…
- $10k upfront
- $1,800/mo
- $200k purchase price option at the end of the 24 month rental agreement
Under that example, you have the opportunity to purchase the home for $200k within 24 months (often times you can purchase the home BEFORE the rental agreement ends with no problem).
If the 24 months comes up and you're just not ready to purchase the home… but you still love the home and want to live there still… just connect with the seller and see if they're willing to offer you an extension on the rent to own contract.
Often times, if you've been a great renter and show a genuine intent to buy the house… the seller will work with you (it's in everyones best interest).
If the 24 months comes up and you're just not ready to buy and you don't want to stay in the house… you can move out and not purchase the house… usually with no penalty.
If you choose not to buy the house, the time you spent in the home is treated just like a rental... since you didn't exercise your option to purchase the home.
That's the key distinction you need to be clear on with rent to own home programs.
That there are two parts to the agreement...
If you decide not to buy the home... you're just deciding not to exercise your option to purchase the house... and everyone walks away looking at that past time as a rental.
Make sense?
Really it gives you as the rental tenant / buyer great flexibility in the deal. If you want to buy the home... you can at a set agreed upon price. If you choose not to... no biggie!
That about does it for this article 🙂
... check out our Orange County rent to own house program on this website and see our available rent to own / lease option homes by clicking the link below.
If you’ve spent time driving around Orange County California or browsing Craigslist or other sites, you may have seen advertisements that read, “Own a home for $500/month. No credit check!”
While it seems too good to be true, local rent-to-own homes are a viable option that many Orange County residents are taking advantage of.
But...
In any business there are a few hucksters who aren't doing the right thing that give everyone else a bad name. But renting to own / lease option homes aren't a scam and they're a really great way for people get on the path to home ownership if your financial situation prevents you from getting a home loan right now. You can find hundreds of great articles online from reputable resources that back up the fact that rent to own (also called a lease option by many people) is a legitimate and great way to work your way into home ownership.
Really the rent to own process is a relatively simple concept:
While rent-to-own homes in Orange County are a valid business venture, there are many things that buyers must consider.
Purchasing a home is one of the most complex financial decisions that Americans make every year, and renting to own is no different. There are several potential pitfalls:
While renting to own is not without risk (and no financial decision is risk-free), there are a ton of advantages:
All things considered, not only is renting to own a home in Orange County definitely not a scam, but a legitimate option for both buyers and sellers. If you want more information on renting to own a Orange County house, the process, and our available list of local Orange County rent to own houses / lease options, click the big link below.
Sign up below to see our Rent-To-Own properties!
Trust deed investments in Orange County California can be a fantastic way to earn solid returns and diversify.
In fact, trust deed investments are one of the methods that the wealthy use to make much bigger returns on their investments than anything you can get on the open market.
In a nutshell, a trust deed investment is a private loan that’s secured by real estate.
Most are short-term, generally under two years, and normally at a high interest rate – 7-15% is typical, even when banks are lending at 3-7%.
Surprisingly, there’s a lot of competition from borrowers who are willing to pay these kinds of rates to lenders – and an increasing number of investors who are interested in funding them.
There are lots of reasons, so let’s start with the basics.
Banks and lenders fall under a lot of regulations that private money lenders don’t necessarily have to follow, especially since they’re not federally insured.
Local trust deed investments are actually more like old-school investing. Trust deeds are built on trust – just like back in the day, when it was common for deals to be sealed with handshakes and there weren’t so many lawsuits.
For these deals, insider knowledge, relationships and potential value matters a lot more than the score assigned by a computer.
But like other high-return investments, there’s a lot of risk involved if you don’t know what you’re doing.
The investors who make a lot of money on trust deeds work with highly reliable brokers, attorneys and experts who help them evaluate the full potential of the loan – and assess the risks involved.
If you’re interested in capturing solid returns from the local Orange County trust deed marketplace, we may be able to help you.
We get requests from people who are looking to borrow money secured by real property (with equity!) who don’t qualify for traditional financing.
As a general rule, most investors want a high degree of security that the borrower stands to make 20-50% ROI with the funds he or she borrows. If the borrower’s plan is too risky or shows signs of probable failure, it’s wise to pass on the investment.
We’re not brokers – sometimes, we may partner with qualified investors to secure deals, and a trust deed is one tool at our disposal.
We’re happy to talk with you about our services and discuss how we can help you make money in real estate.
Real estate investing can be capital intensive. Sometimes you need money to do more deals or to get your deal to a level that you can make money off of it. When you need money, and if you don’t want to go through the typical bank-sourced lending, then you might want to borrow from hard money lenders. In this blog post you’ll read about what is the hard money lender process for California and how you can work within this process to borrow money efficiently.
For some investors, they need hard money to acquire a property; for other investors, they need hard money to fix up the property so it can be ready to be sold or rented. You need to identify your need and have a pretty good idea of how much money you need to borrow.
There are many hard money lenders out there but not all lenders are the same. Some will only lend to certain types of deals or in certain states; others will only lend a certain amount of money. So you may need to hunt around a bit to find the right hard money lender for your situation. If you want to know more about the hard money lending that we do here, and if you want to know exactly what is the hard money lender process for California (and how we work within that specific process) then click here and enter your information.
Once you’ve found a hard money lender who may work within the parameters that you need, talk to them about the deal or situation that you need funded. Share all of your information with them and help them understand why you think this is a good opportunity, what you plan to do with the money, how you plan to pay the money back, and how you plan to benefit overall from the project. Remember: hard money lenders are investors too, so they need to see that THEY will get a return for the money they’re lending, just as you’re thinking about getting a return on the investment overall. Help the lender see this from their perspective.
Once the hard money lender has evaluated the information that they need to make an informed decision, they will make a decision – either to lend the money, lend some portion of the requested loan, or decline the loan.
If you receive some or all of the money, make use of it to complete the deal as you had planned, and repay the loan on time. If you did receive the loan, don’t despair. Compare the loan parameters with your deal to understand the difference and then seek to correct the misalignment or keep looking for a different hard money lender.
Should you get hard money loans for your real estate investing? In this blog post we’ll answer that question for you by sharing 3 potential disadvantages of using a hard money lender in California to help you decide whether hard money loans are right for you.
Real estate investors prefer not to tie up their own capital in a real estate deal but instead they’ll use other money sources to help them do deals. There are many money sources, and hard money lenders are one such source.
There are good hard money lenders out there and hard money loans are a common way to invest. However, every investor needs to decide for themselves if a hard money loan is right for them. To provide you with a balanced view, consider these 3 potential disadvantages of using a hard money lender in California.
A hard money loan is just that – a loan. And loans come with interest, which is the lender’s way of making money for the service they provide. There’s nothing wrong with them charging interest for the loan but you need to be aware that the interest exists and you need to factor it into your accounting. Are you prepared to make principal plus interest payments?
Another disadvantage of hard money loans is that it’s not a bottomless pit of money. You need to figure out ahead of time how much money you need and then you need to borrow that amount of money. Problem is, what if you counted wrong and need more? Either you go back and apply for more or you look somewhere for the extra money.
When you borrow money and have to pay it back with interest, this could potentially delay or reduce your return on investment. For example, if you borrow money to fix up a rental property and then rent it out at $500 a month, any hard money loan repayment of $500 a month will prevent you from seeing any return until the loan is paid off. (These are just example numbers and of course you should structure every loan in a way that makes sense for you.)
Hard money loans are one of many investment tools. They have many advantages to help real estate investors run and grow their business by doing more deals. And just so you know – we actually like hard money loans and believe in them. However, it’s important for every investors to know all the facts up-front, and this information about 3 potential disadvantages of using a hard money lender in California will help you figure out if they’re right for you.
Many investors rely solely on private lending to purchase properties. You can go for this method, or combine private loans with traditional bank financing to get the capital you need.
If you have not worked with a private lender, we can help you understand what to expect when using private lending in California.
We have put together a few things you should know about private lending. Ii may not work for everyone, but for real estate investors, private lending can be just the thing they need to see great profits.
Many investors are attracted to private money loans as the ability to qualify is often much more lenient. Private lenders are looking more at the project you want to finance, then they are at you.
The loan is typically backed up by the property being purchased. This allows people with lower credit scores to still have the ability to flip a home. If the lender sees very clearly that you are making a great deal, they will be quick to finance you as they know they will see a timely return.
A typical mortgage will take around 30 years to repay. A private money loan is typically paid back in months, not years. Private lending is usually expected to be repaid over a short period of time.
Private lenders expect quick returns, they aren't set up as a bank is, where they can be paid back over the course of 20 years. This is ideal for someone flipping homes. You can get quick access to the cash you need, and be expected to pay it back quickly too.
Typically a private money loan will require less red tape and be less time-consuming. Because of this, private lenders often require a higher interest rate. Rates are sometimes double what you see at the banks. (This is another reason to pay the loan back quickly.)
If you plan on holding the property for more than a couple months, you can always opt to refinance with a traditional loan from your bank.
Often times, investors will see a greater benefit in taking a loan with a higher rate in exchange for the speed and convenience they receive. Working with a bank can become a long and drawn out process, and by the time your financing is approved, the property you were after could be gone.
Are you wondering what the difference is between Residential vs commercial hard money loans? Look no further because we’ll help you out in this informative blog post that should answer all of your questions. (And if you have any more questions, feel free to reach out to our friendly and helpful team at (949) 625-4533!
Real estate investors acquire properties, they fix them up and either sell them or rent them out to tenants. This sounds like a great strategy to make money (it is!) but the problem is: it can be VERY capital-intensive, which means it can take a lot of money to run and real estate investing business – and that ties up your money for a while (and what if you need that money?)
Worse yet, investors discover that they can only grow so far using their own capital. Even if you don’t mind your money being tied up, you can only do so many deals at once. If you want to grow, you need even more money.
That’s why many investors are turning to hard money loans as a source of capital to help them. A hard money loan is a special loan for investors to help them acquire properties and renovate them.
Perhaps you’ve been researching hard money loans and are wondering what the difference is between residential vs commercial hard money loans, and which one is right for you.
The answer is that it depends on a lot of situations, but here are some general rules of thumb to help you…
It partially depends on the end-use of the property. Is the property going to be a place for people to live? Or will they be working there? In general, if someone is going to be working on the property, it’s very likely a commercial loan. If someone is going to be living there, then it could be a residential or commercial loan…
If people are living on the property, then it comes down to the size of the structure. A single family home, or perhaps a duplex or triplex, might only need a small amount of repairs so a smaller loan is necessary. This will end up being a residential loan. However, if it’s a large multi-family unit, such as a condo or apartment building, then it will probably be a commercial hard money loan.
Other factors that could determine whether it’s residential vs commercial hard money loan include: whether it’s a new development or a smaller renovation of an existing property; whether it’s a structure or an set of structures (such as a mobile home park), and what the end use will be (such as if you’re renovating a house to be a retirement home for several non-related renters).
Which do you need? Residential vs commercial hard money loans? It depends on a lot of factors so be sure to reach out to us and tell us about your project and we can tell you what kind of loan will help you the most.
