I hope this post get read,
I am a fairly new to investing, new meaning I havent actual completed a money making deal…
But with that said, I am in the position to aquire two properties with a lease option. My concern is that one of the properties is over financed and the seller will not be able to afford the mortgage for long. I offered a solution
in which we reduced his mortgage meaning - I take control of his home, I pay a portion of his mortgage and his pay portion, reason being that his current monthly payments would be too high for a renter or tenant buyer to cover, let alone making any cash flow…
also in our agreement a portion of what I am making from the tenant I put in the property will go directly to principal of his current loan. In hopes that this reduces the loan over a period of time where I could realistic have someone in position to purchase the property.
80% of me say walk away, but this young guy needs my help and if I work hard and do what I say I can do, I could be make a little cash flow.
These are the numbers, this home is fairly brand new,
built in 2002. 3bed, 2full bath. Its not a great location , The house and other houses were built by a non profit org. - right accross the street from low income aparments.
Its appraise value is around 86K … The seller bought the home for 90k. He then got disperate again and refied in March of this year and his new mortgage is 104k. monthly payments 885.00 a month.
With these numbers the house can not be realistically sold until the mortgage balance comes close to 87k or 90k
and thats at least 2-3 years away with large payments on a monthly basis going to principle.
He ask me can sell the house for 88k or 90k and make payments himself on the difference. I told I didnt think so without him getting a personal loan, and or refinancing his truck to pay the original loan at closing.
I Know I wrote alot, but could one of the experts on this board give some type of advice. I meet back up with the seller sometime this week.
The house is in great condition, the seller is single and never used 2 of the rooms, and the kitchen looks like it never been used. I really dont want to just put anyone is the house to get the deal done, I want to make sure the house is well taken care of.
Is this a good deal, to anybody have any feed back