Wall Street Journal pushes extremely bad Rent-to-own scheme to counter high mortgage rates.

Aha!

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I have repeatedly criticized WSJ's Nicole Friedman for incessantly, illogical reasoned articles whose advice is "now is not the time to buy a home.

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In my 56-year career of buying 121 residential units, there was NEVER a year when I was NOT told this is not the right year to buy. So Nicole is not the only victim of this analysis paralysis disease.

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Today, WSJ has another article, this one by ROBYN Friedman. I do not know if Nicole and Robyn are related.

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It is about "rent-to-own," one if the biggest real estate scams in my lifetime. And one of my roles has been uncovering get-rich-quick-nothing-down schemes. My TV "career" on 60 Minutes, Good Morning America, and Larry King Live was about exposing that crap.

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This particular version of the "Lease-Option" scam has a new theme: mortgage interest rates are too high and will probably come down soon. In fact, mortgage interest rates are TOTALLY UNPREDICTABLE .This new lease option supposedly lets the buyer postpone getting the mortgage until that lovely future when the extremely rare in US history 3% rates return.

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Can I explain what is wrong with lease options in 25-words-or-less? Nope. Too complicated. It takes book-length analysis. The good news if you are considering doing this is I WROTE THE BOOK. It is called Single-Family Lease Options.
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A few points:

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* Robyn says during the lease the ten.ant can find a zillion defects and demand the seller fix them. Uh huh. That is one reason why you NEVER allow the buyer to move in before closing.

* Robyn says half the rent gets applied as down payment as the years hence closing. Whoa! Only payments ABOVE MARKET RENT can get such treatment and then only for the excess payment amount.

* Robyn says the tenant may stop paying rent and refuse to move. Yeah. Putting the seller into a landlord position subjects them too ALL the risks of the much sued landlord business. That is only one of the horrors landlords face.

* What if come expiration date, the value of the house is greater or lesser than the strike price in the option? The loser typically reneges. And options are generally easy to get out of legally.

* Robyn says the tenant must be made to do all maintenance. That is generally totally illegal on Planet Earth, but Musk DOES hope to put men on Mars.