Why Is Rent To Buy House in Toronto GTA a Worst-Case Scenario?
Our mortgage expert also Waiting for us so we will touch base with him get a hide from him and then We’ll take it over from there. So let’s head over and to our mortgage expert Faisal. Garcia sir. Yes, sir. How are you? Very fine. Good evening to you, sir Goodin to you and our audience what thank you for joining us. Yes yes, and we have some important things to cover today and Before I start so I had emailed her all our prospects that the RRSP deadline for 1st of March is Right across the corner So if you need to shed some light on that, that would be great You know what? I have a I have few good tips to share So I’m sure all I can say to our audience is stay tuned Wonderful. Ok, so yeah whenever like In between if you can highlight anything that you want to do with our RSP We’ll take it from there. Ok, ok, so let’s get over to the agenda of our day and Let me see if I am on the right screen there, yes so again Good evening. Ladies and gentlemen, I am Your host tonight. My name is Manoj r3 I’m a real estate agent with re/max hallmark we have our mortgage expert with us today and today as we usually do I start with the my real estate monologue and In my real estate monologue today. I am covering a very Perennial question that everyone’s keep on like contemplating on whether to buy or to rent So we are going in to enter into that debate Whether it is good to rent or whether it is good to buy and we will review an article there about rent to own versus rent versus buy debate and then next we will be going into our our format for rent to own homes and Numerous times I have said rent to own homes is a worst case scenario Now today we are going to dwell on two on this one. Why is it a worst-case scenario? So I am going to explain you some of the pointers and see if I can You can overcome all of those particular ones because once if you are in a format Where this is the best option? Even if this is your best option, you need to know all the worst-case scenario formats that can play into come into the picture so that is why I am highlighting you this why is it a worst case scenario and we are going to go into some of 5/6 the detail points why I always keep on saying why is it a worst case scenario and we are going to dwell on that completely and we have our life interview with mortgage expert faisal garcia there and off and on we will be visiting him and Seeking his expertise on a regular basis. So with that Let’s head over to our real estate monologue today rent versus buy So give me a moment here and I can get you on the right Screen there. Okay. This is an article By Financial Post and the authors are Haider morenas bulletin and these are like you have the these are the author’s Murtaza Haider and Steven morenas, so this article is by them and we are going to today review their article today and the article is Rent or by debate now they begin with no right answer to rent or buy debate. I At this moment I am a strong advocate for buying and buying prudently so I may have some bias there But let’s review How they have gone through about it And so let’s review that know write an answer to rent or buy debate But there’s no question who ends up ahead the answer depends on individual circumstances taste preferences and housing market conditions But home ownership does enable forced saving, okay? So now we are when we are on the headlines here Let’s get our expert to weigh in on this and let’s take his reaction on this particular topic and ask him his personal Format Feisal rent versus buy Whom do you support? you know the article actually touches very Very important topic It does say it does not say one or the other But it does say that look at certain certain certain items Sorry, I should say certain variables and those variables should dictate or give you a hint as to Rent, or to all to buy now. I always support the buy for One big reason which is what this article touches force saving. Absolutely At when I used to work for TD there was they had a program where every Bi-weekly, let’s say the pay comes in The program would take out a certain percentage of that pay and force it into a savings plan Okay. Okay now in this country, I’ve not seen someone who’s who’s Proudly said that I can save this much every paycheck It is quite a challenges, okay, because Our incomes are all different. Everyone’s income is different, but our expenses also catch up to that income In fact, they go above our income. Yep so This is a for saving and not just saving it’s also growth Because property is growing in value. Yes and With this particular article. I’m also going to Go through our example So now we are both of the same format that it is better to buy But whenever I’m saying the term buy and that is what I want the audience to understand by prudently not the investor like a crazy going with the 2016 2017 2018 kind of a format where now it has fallen like a third now and that is where things are So it has to be bought but bought prudently And you should run all the numbers carefully and that is what is my give and take on it But I’m going to support that with an example and let’s see if we can get on to that one. Okay? Let’s head over to the article again ok, so now we are on to the article and to buy or not to buy that is the quotient a very like a Lots of things are going there and some people think it is nice You’re in a comfortable one. Let’s keep on let’s not change the equation You very comfortable rain think let’s stay there but but that is where you will have to make an effort and get out of your comfort zone if you are like in that format a Recent report by the National Bank of Canada suggests. It might be cheaper to rent Then to own in some expensive real estate markets in Canada so they are going to give you like a synopsis about the whole Canada and They are saying it might be cheaper to rent in some areas some expensive real estate markets many does wonder Whether they might be better off renting if the monthly rental payments are lower than the monthly mortgage payments now This is where you have to I don’t know whether we can Exactly walk you through there or not? but even if you’re paying higher mortgage let’s say suppose for argument’s sake you’re paying $2,000 on a per month rent that twenty four twenty five thousand dollars has Absolutely gone down the drain now if you have a mortgage and Even if you’re paying three thousand dollars, which we have already said is like a forced to saving that the because the value of the properties are Appreciating and if it has appreciated more than twenty five thirty thousand dollars You are on a better path than renting. Okay Anyway, let’s see what the article has to say for them In the long run though home owners often fear financially better than renters because Home ownership enables forced saving and this is what we have it are numerous times walked you through that it’s a kind of force to saving but office if You are able to afford those particular amounts that has to be checked up because buying in The GTA is in itself a challenge That accumulate over the years growing into a sizable nest egg III will like head back to the expert there and seek his expertise again on this particular one Further sir you you have been a very good example of having been in the process of buying in numerous number of years And I think so. You would be a strong Papa like advocate for Purchasing is at any given time better than renting You know what? Um, so I don’t fully agree with what the article has to say Because it makes it very neutral but Okay, so let’s just say in reality I’ve never seen someone who’s been renting and has ended up ahead from the person who’s owning in the exact same scenario Very true very true. Yeah, I mean until and unless you have goofed up something Mhm, III don’t see anything going wrong there. No, and there was an exercise I even did This was in University where? there was a couple that was renting and With all the numbers and all in detail The buying was a better option And I think it becomes worthwhile to read if the rent is dramatically lower And that dramatically lower rent doesn’t exist anymore No so then What’s the next option next best option? So I think it’s it’s just it’s an imaginary. I would say idea that renting or buying may be the same but In reality, I see owning is the way to go. I Have a query from mr. Al Barsha how it is so If you can elaborate on that query, I’ll be more than happy to take your question there and answer you there But I I mean the rent to own why is it a worst case scenario? we will be picking it up within a few more minutes and If you have any mortgage query feel free to ask or if you have a real estate query Just write it down there. I will again try to explain it to you But the rent to own why is it a worst-case scenario? I will be picking it up after I complete my real estate monologue So we are going to be there chuckling. Okay, let’s head back to the article again The National Bank Reported report revealed that the monthly mortgage payment on a median priced condominium was higher Than the average month rent for a similar unit in Toronto But obvious we have numerous times told you that yes, the mortgage payment may be slightly higher But in the end if the property appreciates then you are in a much better situation Then the monthly rented that you have Okay, so now let’s head further down the bank report compared the total mortgage payment with rent But in so doing the report unintentionally exaggerated ownership cost and Under stated rents. Yes. So the I mean the mortgage expert also picked up on this one The the it’s not the exact Science that was or the numbers crunching was picked up and that may be the reason but I will take you through an example and Try to explain you in simpler terms, see if I can walk you through there The monthly mortgage payment comprises of two parts the mortgage interest and the principal amount now yes, some portion of it goes as your principal but Mostly it is the mortgage interest now. Let me head over to the expert and seek How much is the general? faisal sir, when When we are doing a Mortgage, haha. And do you have a rough idea? How much is the interest and how much is the principal generally? So when? When it is a let’s say a five-year turn and a half a million dollar property So I would say about seventy percent is interest. It starts. That’s okay Yeah, so seventy percent would be 80% Somewhere in that neighborhood 70 to 80 you said? Yeah 70 to 80 Okay, okay, but then it slowly it’s like a funnel Mm-hmm that sort of goes from a higher interest payment to slowly the interest goes down That is numerous number of years. Is that right? no, so first five years you see those numbers and After five years you really see the principal going down really fast. Oh, okay makes sense then. Okay Okay, so that is where we are. Okay, let’s head over to the further into the article The principal being repaid each month is a form of saving yes It is a form of saving and that is where we have said not in the first five years you are saving around 20% to 30% kind of arranged and then after five years it drastically goes into it but in the end it is the saving plus the appreciation of the property and that is what has to be understood a Comparison of the net mortgage payment that excludes the principal is likely to change the calculus in ownership favor so at this moment they are just working on the interest and the principal whereas an appreciation also is a factor into that one and that has to be also brought into the picture and They have done some rent-to-own Okay in Toronto, so if you your mortgage payment may be close to around $2,600 and whereas your rental may be close to around $2,400 so not much of a difference there. But this entire from my point of view is going down the drain. So I Am a strong proponent if it can be bought prudently again Before the principal repayment is subtracted from the monthly mortgage payment the author found that on average The cost of owning exceeds the cost of renting an equivalent dwelling of around five hundred and forty per month No doubt, we have numerous time explained it to you Yes, the mortgage amounts may be slightly higher than the amount that you are paying for the rental But it works out differently in the long range After the principal is subtracted However, the net ownership is around 449 less than the than that of renting ok in markets with growing demographics and economics housing prices often rise over time resulting in even greater capital appreciation Yes, that is also what we are Harping on there is an appreciation and housing prices of and that is where there is a No loss of money and/or Even if yes a very small amount, but in the long run you will win The long term financial benefits of ownership are also well Established. So that is what we are trying to harp on And similarly the author also has given in the end and this is where it wins Rental units are often not of the same quality as owned units a True comparison would require comparing the rents and ownership cost for the same units Yes, that would be a absolute true comparison there When the principle repayment is netted out the cost of ownership is less than renting in most Combination of housing types and location so that is according to an economic housing economist will Dunning so that is where in the end that is what we are heading on to and now Let’s head over to the expert and then I will take an example about this Faisal sir reaction to the full article there You know what actually could you open that article again? I will go through a couple of points I see and I want to touch them. Absolutely If you just scroll up a little bit, okay, so here Toronto market. Yes This is something to keep in mind for our audience as to what we are working with don’t look at the entire chart and Average it because that’s what some of the comparison charts will do So we need to make sure that we’re using our own area when we’re doing analysis. Absolutely. Absolutely Yes, that is downtown core may be different than the suburbs and Weiss Senior ideas right here. I’m seeing Toronto and Hamilton two different ways Yes. Yeah, right. Yes. So in Toronto you see how rent is so close to ownership? absolutely versus Hamilton The rent is a little bit further than owners almost five six five hundred dollars there six hundred dollars there Okay, so those aspects change now if you look at some of the other ones like for instance, Winnipeg? It’s better to own than rent Absolutely. I mean if you go through this whole Calgary Ottawa, Edmonton, Winnipeg Cubic City, I mean everything is showing differently. Yes. It’s her turn around. It’s a turn around Yeah I’m not going to take too much time because we are short on time and we want to let our audience leave in an hour If we can just scroll down a little bit. Go ahead Okay, right there now here It says the cost of owning Exceeds the cost of renting an equivalent dwelling of five forty one per month now the key word here is an equivalent dwelling now in the same article If you cool down further And I don’t want you to because I have another point I’m touching it says that the same the true Comparison is between the same unit rented and Bart. Yes, okay That’s the true comparison now. I have always seen the Owner that live in the property and want to rent that property to someone and Owners move move to the next property has always gotten better rent. Oh, oh, yes Now yes that that is a different chapter. We’ll have to pick it up on a certain date. Yes, exactly yeah, and the reason I say this is from my personal experience where if if Landlord has lived in that property They’ve done all tasteful renovations number one They’ve made the property comfortable you’ve done all small things that add to the comfort what I mean by that is Small things for instance adding a range hood not a big item but most Landlords that rent for just renting purposes will not see that as a value to them but an homeowner that lives in that property and has never actually thought of You know giving it to rental but there are certain circumstances where they have to move for multiple reasons They’ll add range hood I have two of our plus past clients that wanted to add range hood in the first month of owning the property and we had to give one of the referrals so these small things make Make the difference also. Sorry if you can go back to that article. I have something else to point. Sure Now in the markets with grow growing demand demographics and economies housing prices often rise and I want the clients to understand that housing prices are after price There are years there is a slight drop and I strongly say slight drop because if there is a drop just remember this is Like your investment you’re not going to sell it Yes, it has to be like a what prudently and with? Making sure it’s a regular appreciation not an hour crazy appreciation there exactly So a buying prudently is me a one big huge factor But then it is an investment if your house is worth fifty thousand less than last year. I don’t think it matters what if it’s Awesome, sir. Awesome, right Okay Go ahead So that’s another thing and the last point I want to touch is the long-term financial benefits It’s a compounding growth So every year house prices don’t just go up in dollar amount, but they go up in percentage so percentage of four hundred thousand growth of 5% and a five percent growth of 450 is two different girls. So every year you have a compounding growth. Ah, well said very well said okay, so Any other point or I had over to be no IIIi can keep going and I think we need to breathe Yes, we need to like III Have an example to cover there now. So let me head over to that example there now and That would be renting versus buying Okay now See we have to sometimes run some numbers otherwise, if you don’t run the numbers then we have no clue where exactly are we and where exactly Are we going? Okay, so now let me head over to this particular one and I am now going to explain you The this particular one and it’s a chart. We are going to go slightly very fast Because we we just need to give you some idea Ideas about the numbers here. Now most of the time we have seen that the rents these days are between $2,000 and $2,300 per month, so we’re taking some assumption there And then we are going to go on a buy price of half a million with it realities and taxes so let’s go through some of these numbers here if you’re trying to rent a property and Your per month amount is around $2,000 and let’s say all utilities and everything sorry included so you per month per year is spending around close to $24,000 per year. Now. Let’s have if you would have had gone and purchase this property now But office we are assuming that you are able to purchase In case if you’re not able to purchase, but obvious. Yes and the down payment issues are there Credit issues are there and everything we are just trying to keep yes you are able to purchase so Keeping those two equations in place, like whether renting was good for you or buying for is good for you That is when we are explaining it to you So, let’s see suppose you go and purchase a property for half a million dollar The reason we are taking half a million is because that is the price range these particular days Your mortgage around close to 2400 utilities plus insurance and taxes. You come across two up to three thousand dollars Here we have another suggestion to you if by chance You pick up a property Where you can rent out a certain portion for let’s suppose even thousand dollars And the reason we are saying this is because the rental market has become quite difficult So it is in your interest and it is easy that you should be able to rent out the property For $1000 and if you see now both these numbers Remain the same renting remains the same and So this money is going down the drain So that’s why I’ve put a negative mark on this this for renting all year. 24,000 dollars is being lost per year whereas if your house appreciates by 5% then you have to 525 value and you have actually Lived rent-free and you made a profit of thousand dollars also Let me See if I can get back to my article there, which I have messed up to go back Yes, I am back at my article and let’s see. Yes. So now The profit is there but of this you will have buying issues you will have to check your credit Let me get out of the frame for a moment here One second so I can now explain you this particular one And Give me one second here. I am on this one and I have My image out of the equation. So basically if you can You may not be comfortable renting and there is a strong consideration that you have to do is buying as forced saving and you can also ponder on to the equation of co-ownership if by chance you are having trouble of Getting approved all the way up to $500,000 so that would be my intake for Today and let’s see if we can Take the expert reaction on this particular Example that I’ve given go ahead sell Faisal sir Sorry, no, go ahead. You have a very strong point on it Renting versus buying numbers speak for itself. I Have nothing to say it to be honest Numbers say speak for itself. Yes I I mean that particular point if You can pick up a property with half a million dollar and rent out a portion of it You will be actually in the same format as renting And the reason why I’m able to give you these numbers because we have done this exercise Together with so many of our clients over a period of time. Yes, and the main thing here is There is an appreciation value and even in my webinars even from day one I am absolutely harping on this issue that Real estate investment people are making more money in real estate than their incomes and IIIi mean if I pick up a few examples of some of my investors including you I’m not exactly going there. But the main thing here is yes that has a strong proponent to earn income Real estate has virtually become like an ATM these days I Was reading an article there on the other day that it’s a virtual ATM now If bought prudently and if you are able to work your numbers correctly What numbers numbers are the game numbers are the game well said sir, okay so now we are heading back to our Rent to buy and and that is our like webinar hot topic today and We are now going to catch up on this particular one and let’s see how much I can explain you this particular one Rent to buy Why is rent to own a worst case scenario now? We are not walking letting you walk away from it, but Before you walk into the rental own situation or rent to buy situation We are making sure that you understand some of the parameters what you are dealing with and that has to be understood very very carefully and that is the reason why I have Numerous times whenever I have said it’s a worst-case scenario I’m going to explain you white as a worst-case scenario So that is the reason for the headline of this particular topic and let’s see if I can Walk you through further on this particular one now I’ve Before make far for some of my new audience there I will just take up brief moment on what exactly is a rent to own homes so that they comprehend and then we are going to Go to the next one Rent to own simply in some very very simple terms means you are not buying today But you are buying tomorrow. And now that has to be understood very carefully that in this rent-to-own There is a buying there is an owning component to it. So that has to be understood It is not that you are renting it out for 25 years it is not that some investor you generally like your creditors has an issue and That is the only issue that we have dwelt in our various webinars that that is what you are fixing and so the best option Scenario is one year or two years and in that period of time you would like to still go through this particular one and That is why but what exactly it is is you’re not buying today, but tomorrow Now this tomorrow Can be anywhere from one to five years stumps because our Investors generally prefer not to go beyond that particular one and also for you as a buyer It doesn’t make sense. The numbers crunching doesn’t make much more sense So that is why it is better for you to stick to this particular number of years again in rent-to-own Now let’s suppose You will have to buy the property after the end of the term that has to be understood It is so every on day one you have to go through the buying process and Let’s say suppose you went through the whole nine yards and your credit is an issue So that component takes at least one years two years to three years time and so now you would like to do this rent to own and Instead of renting it out. So that has to be understood that is exactly where the rent-to-own scenario comes in between now What is the rent to own homes program and why I call it a worst case scenario now let me Again, explain you this one? This is what I the reason I say it over and our format is accordingly so we explain you this first and then I’m going to take the reaction of the expert and Then we are going to explain you further on it so you went for a mortgage and you are not able to procure a mortgage and The reason for not able to procure the mortgage is not your income Not your down payment issues because the rent to own and the buying both require down payment It is not your income It is only the credit score that we are harping on or we are explaining you That your credit is an issue and on that basis you are not able to procure a mortgage so you are now going to wait for some period of time and that is when we are talking about you’re not able to procure a market and now try to visualize and That is why I’m saying it’s a worst-case scenario No one is even You’re also not able to procure a place for rent So basically you have ran out of all your options That is when you go through this rent-to-own scenario, and that is why I am saying We are addressing the worst case scenario when we are trying to do a rent-to-own home program and that has to be understood by you and That is where we are what we are trying to explain it to you. Okay? so now let’s take our expert reaction on this one and see if I was able to explain this part clearly You know, all I can say is you set the right expectations On that slide what I saw is you’re right as If you have income issues rent-to-own is not really going to solve your income issues if you have um downpayment issues you may not be able to even get started and It but if you have credit issues Those can go away in time Sometimes it takes a couple Of months few months six months, you know things along those lines So it really has to like the score has to be low quite low and so on so forth but yeah, we’ve seen multiple clients that come to us for rent to own and then we start to you know start to discuss and show them and then all of a sudden they don’t seem to like it because rent to own is Really a worst case scenario that is why and and today you’ll be You’ll be able to see further That I have been able to pick out the very very difficult ones And why I’ve always used to say it, but I said, let me go in ahead and explain further today It looks like it looks like it was a challenging one and you made it work because I see a smile on your face Wonderful, let’s go ahead with the article there. So let me take you to the next slide there Okay, now let’s head over and I think so I have I Have said numerous times That rent to own homes is a costly program now Whenever I have said this let me take an example and Walk you through Why do I call it a costly program? Okay, and I’ll try to slightly remain fast because otherwise I’ll be losing on time okay, so let’s take purchase prices around $400,000 utilities around 300 per month insurances per month taxes are around $300 per month Okay, let’s see Regular home purchase and On a regular home purchase. Let’s see here. The we are taking an assumption that the property values for half $400,000 if you calculate the mortgage amount close to be around $2,000 the utilities insurance and taxes and it compounds toward almost two thousand seven hundred dollars per month and let’s assume that the appreciation per year on the basis of a five percent very moderate one and So your value in five years time should be half a million dollars. I’m taking round numbers It may be even more if the appreciation is five percent with compound interest in things like that Okay, your mortgage balance in five years Maybe around three hundred and forty we have just done some rough calculations on these numbers, so don’t take me down tasks on this one And now let’s see if you did the same thing as a rent to own home purchase property value half again remains the same and Now I Think so I have okay Varmints amounts are like two thousand dollars for your mortgage utilities around three hundred bucks and Content insurance, maybe close to 50 bucks so I’ve taken it round to two thousand three hundred and fifty dollars now here is a component that comes into the picture which is Down payment and let’s say suppose your down payment is five hundred dollars per month Okay. So your total comes to around two thousand eight hundred and fifty dollars per month This is the first difference that we will see you’re already paying close to one hundred and fifty dollars per month higher Though some portion is going into the down payment But initially if you see exactly you are paying some amount of money, which is higher Now the option value of after five years. So on day one you had Now signed up on the option value that after five years I have to purchase this particular property for half a million dollars Now your down payment Adjustment will be close to thirty thousand dollars because you have been paying five hundred bucks per month. So in five years Sixty months and you have paid down three hundred thousand dollars The Lisa option buyback price will be close to four hundred and seventy thousand dollars Now I will take the opportunity Here and get myself out of the frame for a second Okay, let me see if I can get myself out of the frame or not Yes, I am out of the frame for a moment, okay Now let’s explain you the balance of the article the difference between the above two formats okay, so let’s see per month amount one hundred and fifty dollars that you were paying extra and The difference Had you purchased the property your mortgage amount would have been 340 left and Now you have to buy this property at 470 we have already adjusted all your down payment and everything and the difference is close two hundred and thirty thousand dollars and Nine thousand on the basis of one hundred and fifty difference in per month amounts. That’s around So the total difference is around one hundred and thirty-nine thousand dollars So the and the property only appreciated from 400 to half a million dollars so you actually Overpaid by close to forty thousand dollars so you are basically paying 10 percent more after apart from the fact that you have lost all the appreciation and you have overpaid so that is the reason I call it as a costly program and let’s head over to the expert there and See if we can get him into Explaining this particular one. I think so he is let me see if I can get him there and Let Let me see if I can head over to this particular one and Okay, so that is fizzles and Let me head over To get myself in here. Okay, so we are here and let’s head over to the expert there Faisal sir Did the example Give you some some numbers inside You know what the examples? the example speaks numbers and numbers are something that are Cannot be like it’s number speaks for itself. So If you can actually bring the slide up I’ll point on a couple of things that I have go ahead sir So a regular home purchase rent to own and the difference So if everything is in line, of course, you know home purchase is the better option but renting to own if Owning is not an option if renting is not an option, but you have a down payment and you have income your credit lacks that’s when you can fit in there and Difference of both of those is right in front of you. I Think picture cannot become any more clearer The the reason I have no problem and that the reason I explain this particular format here is so Whenever you’re trying to do a rental own home program, you should be able to go through all these hurdles III prefer Someone tells me whenever I’m trying to purchase something someone gives me a heads-up on what is the worst-case scenario on this one before I jump into it and Jump with an open mind jump with knowing each and everything Sometimes we have overpaid for a property The reason we have we are in a multiple offer situation We are in any other kind of a situation and we are overpaying but the reason is we know we are overpaying and we know by how much we are overpaying and We have done the numbers crunching whether it is a pre going to appreciate further and we are making a prudent decision instead We have gone into it and then after doing it buyer’s remorse, and then we are figuring it out. Why did I do it? Why didn’t someone explain it to me at that stage? And I may not have done this And yeah You will see I have a smile on me Because I’m looking at the time and I want to ask you how much time do I have because I have a story to share I’m not going to take the address But there is a property that we put in we were in multiple offer Situation and I want to share but I want to know the time In one minute for you, okay, so I remember us buying buying a schewe property the first one and This property that we were buying there were six offers and There were multiple properties that had sold in that neighborhood and the property we were going in with had Had been listed for a few times But this time market was stronger and we had to give going Into a multiple offer situation and I do remember you pulling ten listings. And you said Faisal This one went for this much because it had garage. This one went for this much because it only had a carport This one went for this much for this much. So looking at all this I think we should grow the highest number this But we start here so why I am bringing this this example up is buyer’s remorse the exact word that We didn’t even though it was a multiple offer situation Doesn’t mean you have to pay more Yes, you have to have a very prudent format behind it It’s a it’s it’s the again your formula of worst case scenario. Yes What is the worst case scenario how much can we go? Anyways, I do see you looking at the time So I’m going to stop here Okay, so let’s head over to the next slide and let me see if I can get this right Okay, now I Am going to give you some other rent-to-own home blues This was I have already explained to you that it is a costume program So you have to comprehend and understand that it is a costly program now the next one that I always come and say here is You will shell out more for repairs. So be Geared up that a house whether it is one year two years five years will require some maintenance and You have to shell out that money for repairs and this is your component You are paying extra hydrant, which I’ve already explained you in the last site and you also have to be prepared for repairs Now these repairs but office here is my guidance do a very good home inspection Before you purchase the property and go through each and every detail of it Be and but but be prepared that you have to shell out more for repairs So pick up a property where you are comfortable Instead of jumping right into it, but be prepared for it. And that is why it formulates one of my other Factors in the worst case scenario. My next factor is Remember this if by chance you are late in your payment’s in You can call your bank. The lenders will be much more Conducive to hear you out One month is okay. Two months is okay. They might work out something here Your seller may become greedy here Your agreement may be white if you are late in payment There is no recourse here his agreements of the investors will generally be in a format that They will tell you know The market may have appreciated they may be wishing Like working out that you may not even pick up the property so though your agreement you cannot be late in this particular one and And you all can understand and comprehend life doesn’t go the way it is Each and every one maybe how smooth you think everything is There are issues and that could become a worst case scenario game. So you have to be very very Prudent in this particular format that you can understand this particular one next Let me ahead with two more of the scenarios there You complete the full term of the lease but you fail to secure a market and this is the reality on the ground and That is why I harp on this quite a lot Before you even start the process Get the whole buying equation in place You should have had gone through each and every document with your mortgage broker with your mortgage lender that you did try for purchasing in every way and When they tell you so when you are not able to procure a market they were exactly able to identify you this are the steps or these are the things that you are missing and Now you have to make sure in the number of years that you are trying to do the rent to own You can get those things addressed So that is why Sure. It is in your interest. You will lose your down payment and You will lose all the money that you have done extra in the Rental also so deposit has lost extra down payments that you have done is lost and You have nothing in place and you’re back to square one So make sure you understand this before you jump into this next This is also a very very very the real estate bubble may burst can burst You bought a property for $400,000 or half a million dollars and now you’re supposed to purchase that property for half a million in 500 in five years time and the property didn’t appreciate at all and now you are not able to even procure a mortgage on the basis of because you have to purchase the property on half a million dollar only and the property is just stating at 400 or 422 come up with the further difference of Getting that particular half a million dollar property. So you have to understand this particular format so that is why a more prudence is required then a regular one and that is where I keep on you know Like making sure you understand each and every blue that is there in rent to own home equation now I have one more last one before we take over to the Expert and close it dig now This has to be understood You have done everything right on your part and This could be a part Which has nothing to do with you? But yes, you can be stuck into this particular one The seller can lose the home to power of sale and foreclosure you are giving him Absolutely everything on time, but he is like out of the blue. He stopped paying to the bank And what did he do now you will get to into a legal complexity but yes you have to make sure That those particular things are also taken into consideration when you are Trying to do a rent-to-own. So these are Whenever I tell you it’s a worst case scenario It is not. I’m just giving you this there is something which is there at the back end of it and let me see how my expert weighs it out on this particular one and that concludes my worst case scenario and for for today and I hope I have been able to walk you through and that is the reason why I call and Why do we call our program as a smart rent to own home program? because we will go through all the options on the table before we make you jump into this and that is where we take the longer route and not the shorter route and let’s see if My expert can weigh it out and see reacts to my input on The worst case scenario go ahead, sir so I don’t think there’s much to be said on it because to be honest, you’ve covered everything there has to be Everything in detail as much as possible all the Pitfalls are out on the table. Just so the client doesn’t feel like they have been taken advantage of Absolutely, and I think so Go ahead if you had need to add something and then I will conclude this because we are almost at item in 759 and I don’t want to add it. Okay. Let me give our Our give me one second here. Let me take over to your websites and let me take our Audience to so our experts website here We is Faisal Garcia calm so that is his full name Faisal Garcia calm and you can reach there and get everything Seek more expertise from him on mortgage his other website which is an awesome website coming on a daily basis is his credit repair now and you can head there and get credit repair now dot CA and that would also give you all the information regarding him and My websites you have already been you can go to my webpage Which is like Manoa 3.com and then you can click on rent to own homes zero down information power of sale information and also if you can subscribe whenever you want, you can subscribe to our YouTube channel and Also, you can subscribe to my daily newsletter Which I sent it curate some seven to eight articles for you and email it to you on a daily basis and with that I conclude as we are on the exact one eight o’clock mark and Thank you very much Faisal sir and to the audience and we conclude tonight. Thank you very much audience. Please like share and comment on the videos Absolutely, sir. That’ll be great. If they can do that. Wonderful. Thank you for expertise Thank You audience. Thank you five Bye good night for it