Leasing option


Here is my situation. I know an investor who is looking to sell 2 currently occupied rental properties for $100k. She no longer wants the responsibility of the properties and wants them completely out of her name.

I would like to put together a proposal to purchase the properties but I am unsure of whether to utilize a promissory note or lease to own. Basically, I would like her to operate as the bank (she owns the properties free and clear). So basically it would be like me borrowing $100k from her at 4.5% interest. I would pay interest for 59 months of $600 plus $260 towards principal for 59 months and have a balloon payment of $84,000 due on the 60th month.

Anyone have any advice on this situation?

Thank you in advance.

Pitch this as more of an ‘annuity’ offer, rather than seller financing.

Old people love annuities, and they want them to go ‘forever.’

So, frame the seller financing offer as an annuity, as in 4.5% for 30 years with no down, or balloons …since the seller remains in first position and is fully protected …and will be dead in 10 years anyway.

You could offer the seller a couple of choices.

  1. Full price, seller financing, no down, low interest, long term annuity.

  2. Lesser price, seller financing, a little down (over time?), low interest, shorter term annuity.

Either way, it’s an annuity-flavored offer with seller financing to a ‘senior.’

Otherwise, everything’s potentially negotiable.

Give the seller what she wants, and take everything else.

Find out if she’s got any heirs. If not, find out where her estate is going when she kicks the bucket. Ask if she would donate the remaining balance of equity owed at the time of her death …to you …like, as long as you pay on time, and are not in default… This requires some easing-in and some finesse.

Otherwise, you could say, "Since you’re a barren spinster with no heirs, and nobody loves you anyway, why not give me your house when you die. It’ll keep it out of the government’s hands. Why not, “Grandma?”

“Ask not what you can give to Grandma. Ask what Grandma can give to you.” ~~Javipa

Of course, I’m half-kidding… Just half. :beer


One of your best in a LONG time.


LOVE your response LOL!

However, she won’t be kicking the bucket anytime soon–she’s fairly young–and very healthy and very wealthy!

What about a sub2 deal? Although I’ve never done one of these and there is no mortgage on either property. One property has an auditors assessed value of $54.4k and the other $55.4k.


Sub2, by definition, isn’t a financing option on free and clear property.

Sub2 is taking title ‘subject to’ an existing loan/lien. No lien? No Sub2.

However, the sky’s the limit on creative ways to finance a free and clear property. It just depends on the flexibility of the seller in how he gets money, and how fast.

I pm’d you a link to an ebook I compiled of Robert Allen’s favorite down down payment formulas. They are classics, and yet becoming less known and understood, I’ve discovered.

Meantime, work to give the seller what she needs, and take everything else.

private message me that link, lol

Sure, what’s your email? j/k!!!

Thank you!