Thanks in advance I’m learning a lot from the site, and the info everyone provides.
Well, I’m trying to finalize my first deal as an investor, and there lies my dilema.
I’ve ran across a 1yr old home in Immaculate condition, in a fairly new suburb, in Northern Kentucky. I’ve been working with the owner for about 2 weeks now and he has finally come to terms that his home isn’t moving.
His terms; a 1yr lease option, at $1,000 w/price of $140,000. $200, rent credit per month. He has offered to extend the lease for an additional yr, but the purchase price will go up $5000. This guy really wants to sell his home.
For reasons that he fails to mention, he has to move into a condo and can no longer afford his home. On top of that He can’t move, until he gets the downpayment from me.
Tonight I realized that this owner is extremely motivated, and I’m not sure how to make my next move.
Any advice would be greatly appreciated.
How much is the house worth? How much are rent going for in the area? You mentioned downpayment, how much is he asking? Give us some details and maybe I can help you!
Two houses on the blk sold earlier this year, for $143,000 and $145,500.
Homes are renting between $1,000 and $1,400
He desperately needs $2,000, but his bottom line is $1,500
He wants to be sale the home, but to cover his payments he’s willing to do a short term l/o. I’m looking for something longer, but how do I propose it?
How much is his PITI? Will he let you take over his payments? If not, how much rent is he looking for?
Roughly $1,000, he’s primarily looking for someone to cover his payments. Now how do I roll this into a sub 2, and obtain the lease?
So if you were to take over his payments he would give you $200 rent credit?
140k Option to purchase
1k/month rent ($200 rent credit?)
1,500 Upfront (Will he credit this toward the purchase price?)
How long of a lease term is he willing to do?
Yes, he will credit the dpayment.
5K is pretty steep for an additional 12 mths, is this a tool to motivat me to purchase.
If I were you I would do a Cooperative Assignment on this one. Just not enough equity to work with. Maybe a little positive cash flow per month. Get your money and get out the door. ;o)
Cooperative Assignment? Never heard of that one
You work with the seller. Let me break it down to you!
140k Option to purchase 12 month lease
1k/month rent with $200 Rent credit
Ok do it this way:
Tell him you will give him this if he lets you work this deal.
$1,000 Month / $200 rent credit
145K Option to purchase
Tell him that you will help him find a tenant/buyer that will pay these numbers. Tell him if you do this with you, you will only charge him $0. Of course he will ask how are you going to get paid. Tell him that the tenant/buyer will pay you! So no cost to him.
Now once you have him under contract. Find a tenant/buyer that will pay this amount and assign your contract to him. When you do colllect 4k - 5K option to purchase fee. Minus the 1,500 you gotta give the tenant buyer! you pocket the rest. But make sure you tell the seller to credit the option fee that you collect!