Most people who buy US property become landlords. I don’t.
Every house I own gets sold to a family on an installment sale. They pay me a down payment and a fixed monthly payment, and the house becomes theirs. I become their bank.
It’s the part of my model that people find hardest to believe and easiest to love once they get it. So here’s how it works.
The rent trap
Across the Midwest there are families who’ve rented their whole lives. Not because they can’t afford a mortgage payment. Because no bank will lend to them.
Nobody taught them how credit works. Their parents rented. Everyone they know rents. So they bounce from rental to rental, the rent goes up every year, and any landlord can give them 30 days to get out in the middle of the school year.
Rent money is dead money, and they know it.
The offer
So we say this to them. For what you’re paying in rent right now, why don’t you become a buyer and we’ll be the bank?
The family pays a down payment, usually somewhere between $2,000 and $4,000. Then they pay a fixed monthly amount, usually over 30 years. That payment covers principal and interest, plus the property tax and insurance.
Every payment builds their equity. The payment never goes up. Nobody can sell the house out from under them.
Why it isn’t rent-to-own
People mix these up all the time.
Rent-to-own is a lease with an option to buy later. The family stays a tenant, and to actually buy the house they have to qualify for a bank loan down the track. Most never manage it, for the same reasons they couldn’t get a loan in the first place.
With an installment sale there’s no refinance waiting for them. The agreement is the loan. I stay the bank until it’s paid off.
Why the family looks after the house
This is the bit that changes the numbers for the investor.
It’s their house. When the toilet breaks, they don’t ring me. When the water heater dies, they sort it out. You don’t call your bank on a Sunday asking it to fix the plumbing.
One of my buyers, a mum of three, told me it made her feel like a grown-up for the first time. They’d rented their whole lives and the landlord never fixed anything anyway. Now she’s planning to sand and restain the floors herself.
That’s pride of ownership. You can’t pay for it.
Why the interest rate is higher than a bank’s
Families on my installment sales usually pay around 10 to 11% interest. Higher than a bank, and it should be.
I’m taking a small down payment instead of 20%. I don’t pull a credit score. All I ask is that they show me they can afford the payment, mostly so I’m not setting them up to fail.
In my experience nobody pushes back on the rate. They’re too busy being excited about owning a home.
Who pays the property tax
The title stays in my company’s name until the house is paid off, so the tax bill comes to me. That’s why it’s built into their monthly payment. I hold that money in a separate escrow account and pay the bill when it’s due.
What if they stop paying?
The same thing that happens with any lender. The house comes back to me.
I keep in touch with my buyers, so if someone’s falling behind I usually know before it becomes a problem. Most of the time we talk it through. When it can’t be fixed, a lot of families simply hand the keys back. Sometimes I’ll offer cash for keys to make it quick.
When none of that works, there’s a formal legal process, and it depends on the state and the agreement. It happens. It’s part of the business.
The down payment gets held aside to cover exactly these costs. Then the house goes to the next family.
What if they want to move?
They’ve got options. They can sell the house and pay me out. They can rent it out themselves, keep paying me, and pocket the difference. Or they can hand me the keys.
It’s their house. They decide.
Why I don’t keep them as rentals
Because I’m not buying for appreciation. If the house doubles in value, the family gets that, and good on them.
I’m buying for cash flow. Cutting out maintenance and repairs is the biggest thing I can do to maximise my profit, and in these towns house prices have barely moved in decades anyway.
The seller gets out clean. The family gets a home. I get paid like a bank.
See every document on one deal
I put together the Anatomy of a Deal teardown: one house I bought and sold on terms, with the deed, the closing statement, the lender’s mortgage and the family’s payment history. Every number, nothing hidden.
These are results from my own portfolio. They aren’t typical or guaranteed, and your results will depend on your capital, decisions and the market. Real estate carries risk, including loss of money. Nothing here is financial, legal or tax advice. Installment sale documents differ from state to state; use a US attorney for every sale.
