I have a fsbo that I can get to 290 and comps are 330. There are very little if any repairs. The thing is, there is a couple that wants to rent to buy. I dont know how to make this work and I need to find the money in the deal. I myself do not want be the owner of the property. Can someone help me see the money if there is any?
You do not give alot of detail. You say you have a FSBO, do they want you to purchase outright? Will they do a L/O with you or Owner Finance? What is the monthly mortgage payment, what is your market rent for a property like that? You do not give details on the property. If you give a little more detail they may be able to give you a more accurate answer.
Ex: If seller will do a L/O with you and you have a person ready to do a rent to own than you would do a Sandwich Lease Option. That means you would contract with the seller at a price and sell to your T/B for a higher price. Need more details.
Good luck,
boricua00
Yes, they want me to purchase outright. They might owner finance. The monthly mortgage is 1800. The market rent is 2200. I am not sure if this all helps. It will be tough to cashflow this property. I will need to get around 2600 to get positive cashflow.
How motivated is your seller? See if they will consider doing a lease option with you and you do a lease option with the people you said that want to rent to own. Make you L/O for 2 to 3 years and contingent on you finding a tenant/buyer within 45 to 60 days. Collect a 3 to 7% option consideration from you T/B and do a 1 year lease with an option to buy with your T/B. If their mortgage payment is 1800 then try to negotiate your payment 1800 to cover their mortgage, less if possible. Then turn around and rent it to your tenant buyer for 2200 if possible with the option to buy at 330k or 5 to 10% higher if the property can maintain that value in a year. Give them 50 to 100% credit on their rent as an incentive, put an ad in the paper once you get it under contract?
This deal is all pertinent on your seller being motivated. Don’t think you want to go get a mortgage on this house and have to put up 10 to 20%. If the seller is not motivated just walk and tell him to give you a call if he cannot sell it.
Good luck
Eddie
So I should leave the sellers mortgage in place and there would be a $400 difference between my option and the tenants. What are my clauses to include in the contract. The seller is motivated because they just dont want to keep paying on this second mortgage. They already moved into a new home. What risk do I run on this. I will have to see if the tenant can actually afford to purchase in a year. Anything I should look for in lining this up as in certain checks to make sure it works out?
also, I had offered to pass this deal to another investor and they did not think the numbers would work out. I wasnt sure where there was a miss. They said that 2200 would break even on cash flow even though the mortgage is 1800. It seems to make sense to me that my numbers do work and that I should check to make sure it includes taxes and insurance.
yeah that’s one thing that you need to make sure of (that it includes taxes and ins.) plus there is some other stuff that you need to negotiate with the seller/s. make sure that you do all your due deligence and they are rock solid.it seems to me that the numbers can work if everything is in the right place but is up to you to make sure it gets there.if don’t think that you can take on this deal walk don’t get to where you think that this is the only deal out there.also if they are willing to l/o to you make sure that they’re not gonna cause any liens ect. to get on tittle in the future.ask questions and do your due deligence.it seems to me like you need to read a little more from this great site.and please verify anything that I write, don’t just take my word for it.
Good luck and God bless