ILLINOIS (IL)

Anybody familiar with the advantages and/or disadvantages of Land Contract (Contract for Deed) vs Lease Option in Illinois?

I've got several trashed out former rentals that I'm planning to rehab this spring/summer, BUT if the right someone came along and wanted to L/O or buy them on CFD before I get to them I would certainly consider it.

My biggest questions: How expensive? - and - How long does it take to get them out? - - Basically, Illinois Eviction vs Foreclosure.

If you're currently doing or have recently done either one would you mind sharing your criteria for deciding which to use when, how you screen, the cost/time to evict vs foreclose and any other problems/issues/benefits you wish you'd know about before you did yours (either one)? If you've had great success with either one would you share that too?

Lastly, I've been looking for an attorney but so far haven't found anyone close that seems to really be interested in this, especially Lease Options. If anyone knows one in the Southern Illinois area I'd sure appreciate a suggestion.

Thanks in advance!

Tim, My experience with attys is that most don't really have a clue when it comes to this.

Start with your goal. Mine is to give the applicant a reason to sign with me rather than you. Some kind of added value. My advertising says "stop running the rent hamsterwheel."

I want an applicant who plans to stay longer. (but they don't)

I want an applicant who is wiling to handle his own repairs (some do but most don't).

I want an applicant who is ready for more than just plain renting.

I want to make more money than basic renting.

Land contract:

-I must foreclose if they fall behind.

-I lose legal control of the property.

-I lose the precious DEPRECIATION that keeps my taxes low!

Lease with Option to Buy:

-in Indiana, the law says I can keep the option fee. Check your state. For basic houses I charge $1 more than the rent. For nice houses I charge $5000. And can legally keep it without applying it to unpaid rent of repairs at move out.

-I can evict normally.

-I keep the depreciation deduction on my taxes

-of the last 300 lease options, not ONE has bought the house so I repeat the process.

Thanks Brad! I've been doing some research & it all leads me right back to the same things you said.

Interestingly, in Illinois if the Buyer has LESS than 25% paid on the purchase price you can evict instead of foreclose. Still has lots of other disadvantages though as you mentioned & I bet some of the folks I've met as 'The Manager' could get really 'creative' if we ever ended up in a courtroom. Might start with an eviction but end up months later with it twisted into a foreclosure. Not sure how they'd do it, but I sure do know they'd try!

CONCLUSION: Don't see any tremendous advantage to CFD but it looks like there are a lot of potential problems that could make you lose money, time & sleep. Looks a lot safer to just stick with the tried & true (& much harder to misconstrue in front of the judge) Lease Option.