Hi guys. A lady called off of a flyer and she has a house with $160k owed on it with a $1400/mo. payment. Is this way too big of a monthly payment for me to even consider taking over the loan subject 2 and leasing it out to a tenant/buyer? I guess it all depends on market rents, but what other factors come into play? Thanks guys.
How much is the house worth?
Close to $160k.
If the house is valued at what is owed, I don’t see a deal. What is the benefit of you taking over her payment with nothing in it for you? Especially at $1400/month where it will be hard to find a tenant so that you break even. Don’t see a deal here unless she is behind in payments and you can try and do a short sale.
If the rent market will support the monthly payment, control it with a 3-5 year lease option. Get a tenant/buyer and you can make some money up front by assigning the contract. You get a little money and your out of the deal.
I don’t know your market… but remember that you usually get higher rents on l/o. Plus you should get at least 3% nonrefundable option deposit. You could also ask the seller to pay for part of the payment.