Heres this one im trying to learn the benefits of one vs the other?
Seller out of towner with vacant property, been tyring to rent since June 07
SFH he owes $145k with pmts of $1135 PITI asking $1,000 for rents no hits, home needs a bath. Has it with a realtor for marketing it as a rental he’s not happy with realtor and her marketing of it. Comps sold for $170 to $185 on less of a lot.
He mentioned he would consider an all inclusive Trust Deed to move the property. Im not sure how an AITD works to benefit me the Investor, vs a Lease Option. What is the better of the two? and why?
Home is on a full acre lot that can be split up in time for more parcells. After a bath home could net $900 or so. If this is a deal what is the best way to get a win win out of it? Seller open to any ideas from me.
Anxiously waiting your thoughts.
With a AITD you get the title, with a LO you don’t until you use your option and re-fi.
The AITD is a wrap around mortgage. You wrap the existing Mortgage around what ever other moneys he may want. So if you use this you’ll have assume the first lean plus some more for his profit. So if he can’t rent it for 1K why do you think you can? You’ll end up with a negative cash flow.
You could lease it and if you don’t get a nice size cash flow you don’t have to exersize the option. Doesn’t sound good to me in any way.
herbster
Thanks Herbster, From what your saying im better off with a AITD if and when i make a deal for such. Now i think i can rent it or lease it because im here in town with skills to clean it up and market it accordingly. Im not sure it will pencile out but my main question was the AITD vs Lease option. Sounds like AITD is better for me?
Im thinking he might even assist in the payments for a period? Im working on all ideas to make it pencile out?
I’m not saying either is best for you, its your RISK. Yes you can fix the bath and it might rent a little higher but not high enough. Don’t buy it thinking you can split the land until you know for sure you can.
Wait for some more replys, especially from someone who knows leases more than I.
herbster