So while looking for a wholesale opportunity or a short sale, I’ve found myself in what seems to be a great position for a sandwich lease option.
In talking with the seller, I threw the idea out there of doing a lease option, and explained pretty much the entire process, inside and out. The seller knows I’m in it for a profit and is OK with it, they’re open to up to a 5 year lease/option.
The house is on the market for $180k and after running the comps, I’d say the current value is right around there. It’s been on the market a few weeks, but the offers they’re getting keep falling apart. Mortgage payment is $1,100 and rent’s on similar sized houses in that area are $1,100 - 1,600
What are the best ways to structure the contract to avoid having to pay the option consideration fee / deposit out of my own pocket? We talked about maybe doing something hybrid, where the seller would get a share of any profit above a certain point when the house sells, as well as my lease payment being $100 more than the mortgage to give them some money in the meantime, so would it be reasonable to shoot for no money up front?
Since lease options aren’t really my focus, I don’t have any tenant-buyers lined up. I was considering throwing an ad up on CragsList to see what sort of response I get. Is it typical to do this and tell the calls that the house might already be rented, that you’ll get back to them if it becomes available?
The numbers in my head are saying the monthly payment will be 1,200 to the seller and 1,500 from the tenant-buyer, with my purchase price being $180,000 and the purchase price to the tenant buyer would be $210,000. How do I determine how much $ each month goes towards the purchase of the house?
What details am I missing (if any)? Any advice on ways to make this deal work best?
Thanks!