How would you approach this deal?

My friends in Westport, MA were able to rent an incredible waterfront property for about $1500 / month (split between four of them). The property is set up to have 3 units, but the landlord only rents out the bottom floor because she is weary of having too many tenants. From what I hear, the UMass Dartmouth hockey team beat the place up pretty good back in the 70s, and she’s kept it one unit ever since.

She is obviously not getting anywhere near what she could out of the property. Install a few appliances, for the 2nd and 3rd floor units, and she could triple her rent (and the first floor rent could be higher as well). I don’t know what she is getting for the summer months, but I would hope she would be renting it out weekly for a good amount of money to vacationers.

I’d like to approach her and work out a deal where I could help her manage and rent out the 2nd and 3rd floor units, but where I would agree to be liable for certain damages, to those units to ease her worries.

She also seems like a possible motivated seller since she is letting the property just sit there without much benefit. I assume she’s not making much cash flow, because the value is high and taxes and insurance would eat that up.

One possibility I was thinking is lease option out and make some serious cash flow by renovating the upstairs units. I’d even offer to share some of that cash flow with her to be more convincing. 9 month leases to UMass Dartmouth students, and then big vacation rental money during the summer.

Thanks for reading all of that… How would you approach this deal?

I would lease/option the property so the owner is relieved of all headaches. She might be happy to get your steady lease payment with no worries. Since you are handling everything including the midnight trouble calls, the lease payment should be low. Set up the contract so that necessary plumbing repairs, pest control, electrical & roof repairs are paid by you and then deducted from the lease payment.

Have an attorney help with the option part. Maybe talk to her attorney to find out what would work for her. Then you have a starting point.

I would fully furnish the units since you are in a perfect location for holiday and student tenants. Then I would use the cash generated by the property to exercise the option and buy the property. Check with local lenders on the feasability of your plan.

Good luck. You will need to do lots of estimating and research. Just keep it very simple and stay on the owner’s side.

Furnishedowner

What deal?

…a possible motivated seller…

Have you spoken with her? What indication has she given you that she is interested in selling her property?

Chris

This deal has so many upsides. The only struggle I see…is she a motivated seller YET!

Showing her the benefits of selling and her keeping her present income could be the trick.

Try not to be discouraged, it could take a day to years to get her to be motivated enough to sell on any terms or price.

GREAT FIND! Good Luck , stay focused and take action!