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RENT ESCROW: THE TENANT-BUYER ASSURANCE PROGRAM

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Avalon Bookkeeping, LLC dba Avalon Escrow

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Just who are Avalon Bookkeeping/Avalon Escrow ?

Just what do they do ?

and...

Just what is our tenant-buyer assurance program ?

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The answer to these questions and more are on this page. So, read on ...

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Avalon Bookkeeping, LLC dba Avalon Escrow is an independent 3rd party escrow company that collects the rent each month from tenant-buyers and pays all associated costs with the property. They do this preferably by ACH (electronic check) and the funds from the tenant-buyer are used to pay the mortgage for the seller plus taxes, insurance and any other associated monthly fees. This ensures that the seller's mortgage is paid and that they aren't using it for a new home or food or, well... ___________ (fill in the blank - LOL).

This service was created because too often the seller would use funds elsewhere and then the tenant-buyer would find the property which they are renting-to-own in foreclosure and then they could possibly lose their option deposit/down payment and then, even worse, possibly be evicted. This peace of mind to the tenant-buyer is our tenant-buyer assurance program. Also, in the case of assignment lease purchase arrangements, the tenant-buyer may sue the investor if the deal goes south even if they had nothing to do with it. As such, investors may want this service as well.

There are many benefits of our tenant-buyer assurance program, not only for the tenant-buyer but for the seller as well. Below are just a few examples of these benefits:

For the Tenant-Buyer:

  • Ensures that the rent is received by the 1st of the month so there is no dispute on any rent credit for on-time payments.
  • Ensures that mortgage is paid each month, as it is done by third party.
  • Ensures that taxes, insurance and all other items are being paid regularly.
  • Dealing with professional escrow company that has good customer service.
  • Can be set up to pay and maintain renter's insurance.
  • Ensures that if rental amount does not cover the full mortgage, the seller's portion is being collected and paid as well.

For the Seller:

  • No direct monthly contact with the tenant-buyer. Seller can move on and know their property is being taken care of on a monthly basis.
  • Monthly bills associated with property are being paid.
  • No need to deposit/cash/mail checks that come from the tenant-buyer.
  • Complete accounting for their CPA to ensure maximized tax benefits, as well as convenience of all information in one spot.

There are many other benefits to both the tenant-buyer and seller (and investor if cooperative assignment or sandwich lease purchase) as well. The items listed above are ones that have been pointed out by customers of Avalon Escrow as their favorite items. If you would like more information about these benefits, please CONTACT US.

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RENT ESCROW FAQ's

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Question: How much does the Tenant-Buyer Assurance Program cost ?

Answer: There is a $200 start-up fee plus a $50 monthly charge that is included with the rent, sort of like a rent premium but in this case, for the escrow service provided by Avalon Escrow. None of these fees are charged by us but instead solely by Avalon Escrow for their services.

Question: I am enrolled in the Tenant-Buyer Assurance Program which automatically pays the rent on the 1st of the month so I can always get the on-time payment rent credit which has a due date of the 1st of the month. What happens if the 1st of the month is a Sunday, holiday or other non-business day ? Would I lose that month's on-time payment rent credit ?

Answer: No. In this case, the transaction could be processed on the following business day. Also, the lease purchase agreement could stipulate that in this case, the on-time payment rent credit would still be given as long as the rent is paid on the first business day of the month. Alternately, the rent escrow pull date could be rescheduled earlier (before the 1st of the month) so that there would never be any dispute on this issue. Its all about flexibility - a solution that works for both the tenant-buyer and seller.

Question: What happens if I do not have enough funds in my account to cover the rent on the designated rent escrow pull date ?

Answer: You would be charged a $50 insufficient funds fee plus any late charge. Therefore, it is important to have the required funds in your account available the business day before the rent escrow pull date.

Question: Can I cancel the Tenant-Buyer Assurance Program ?

Answer: Yes. To cancel automatic payments, send a certified letter to Avalon Bookkeeping, LLC, 21380 Lorain Rd., Suite 201, Fairview Park, OH 44126 at least ten (10) days before the next scheduled rent escrow pull date.

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One last word about our Tenant-Buyer Assurance Program: We will make every effort to make the program available to you. However, since the program is not mandatory for the tenant-buyer and also requires the seller's consent, the tenant-buyer may opt to not use it or it may not be available due to lack of consent on the part of the seller. Therefore, DR Investment Properties shall not be held liable if seller defaults on the mortgage loan thereby causing it to go delinquent and subsequent foreclosure, etc. if the Tenant-Buyer Assurance Program is not used.

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If you would like to enroll in our Tenant-Buyer Assurance Program or would like more information, don't hesitate to CONTACT US. We look forward to working with you !

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