You’re either doing an extremely sophisticated hybrid of a lease/option/installment sale, or you’re mixing oranges and apples.
What does 10% interest mean on a lease/option?
I can only assume that your lease option rent and consideration equals a 10% pi payment? If so, who pays for taxes and insurance?
Why is the tenant buyer NOT willing to pay you full retail in return for waiting FIVE years for your money…?
Your first statement suggested a purchase price that reflects a 37% discount off ARV. Then you said you had an tenant/buyer offer of $60K, which reflects only an effective 30% discount off the actual sale price. That’s a pretty hefty difference at this price point in actual dollars.
Then…you said you don’t have a buyer at the 37% discount price anyway…
Somehow you’ve got two exit strategies mutually dependent on each other; a cash buyer/investor AND an end/user/tenant buyer.
Wow, OK, I would simply contract to close with the end/user/tenant buyer, contingent on finding and closing on the cash buyer/investor first.
Otherwise, without the first buyer completing the primary purchase, you’re not able to deliver a marketable title to the tenant/buyer. Am I missing something?
What you could do is simply market the house as a “flip-in-progress” to an investor.
I would then sell the ROI you just created out of thin air.
I’m not going to do the get nitty-gritty with the math, but it seems like you have created a potential gross return of $30k over five years (in payments) plus another $19k (in gross equity spread profits), for a total profit, before expenses and taxes of $49k.
The return on your first buyer’s investment will greatly depend on the leverage he uses, but…for all cash…that’s an annual ROI of about 16%+
That should attract some attention.