Analyze this: Let me know what is best option

General Real Estate Investing
1

I found a 4plex property from a local landlord who is willing to do contract for deed if I want to property. Tenants pay all electric and heat, landlord pays water and trash. The property did not pass the 2% rule so I will not buy the property. Please look at the numbers and let me know if this is a possible Lease Option deal.

Amount Owed - $207k
Monthly Payment - $2k (PITI)
Gross Rent - $2,945 (Local Market Rent is $3,475)

Please let me know if there are any other numbers or anything else I’ve missed for a correct analysis.

Thank you,

Yia

2

To answer your querstion, we need to know how much the property is worth in today’s market. Is it worth more than the mortgage balance?

3

I’m waiting on my realtor to pull comps for me for this property. One thing I forgot to mention is that I want to L/O this place just for the cash flow.

Yia

4

You may want to reconsider lease-optioning from the seller.

Its a 4-plex, so guaranteed you are going to have your day in court to evict tenants. Get used to it…

If the issue ever comes up in front of the judge that you aren’t the owner, you might have a few headaches…

Get seller financing (Contract for Deed, land contract, or a mortgage from the seller) and take ownership.

5

Okay, so I got the answer from my realtor regarding the comps for this property. There haven’t been any 4-plex that were sold within the past 120 days - everything else was either expired or cancelled. The last 4-plex that was sold in the area was in 06/26/09 for $175,460. The sold 4-plex does not have as many bedrooms per unit as the subject property.

Considering the numbers and my intentions, would this still be something worth pursuing?

Yia