Hi Everyone -
A good friend of mine lives on a lake and recently told me that her neighbor (a man who rents his lake home out) has been talking about selling because his rent turnover has been so high.
This property is prime vacation or home property, but the home on it is 2 bedrooms, 1 bath and is a fixer. He’s thinking he wants $200k for it. The assessor’s office gives it that value, as well, and as we all know, market value can often be quite a bit higher.
Here’s my scheme: ;D
Contingent upon a satisfactory inspection, I propose that I lease for a year at $100 more a month than he’s currently getting for rent, with an option to buy one year from now for a price we agree to now. To sweeten the deal if he’s not biting, I pay his property taxes over the next year. In return, I can make whatever improvements I want (floors, paint, landscape), with any major changes with his approval.
If, after a year is up, I need an extension, I get six more months. If at that time, I still do not buy the house, he’s not out anything, rather, he has an improved home and has made a steady cash flow.
This is my first potential investment and it looks like a great opportunity. Do any of you see holes in the plan?