Seeking Advice


I appreciate ideas or advice regarding methods to control a property.

The property is rented at 3500.00 per month and the
owner has a assumable mortgage of 250 k.

The owner would like 50 k above the mortgage at some point.

The owner does not like the responsibility of a landlord.

How can I work out a win situation for the owner and myself.

Hopefully I am posting to the correct section.

Thank You for your time.

Hi there.

Got some questions for ya.

$250k property is kinda on the high side for rentals. Is this low to midrange house in your area? Where does it stack up?

Also what is the ARV and what are you buying the house for?

What’s the PITI payment on this property and how long has the renter been paying $3500 per month?

More info would help the quality of the response.



Thank you for your reply.

The property is mid - range for the area, yet the worst in the neighborhood regarding sq. footage. Not a mansion or mc mansion. Many of the homes are 7 - 12,000 + square feet, some having hundreds of acres, full time staff etc. At the peak in 2006 a similar property would have cost about 1.2m, it is only 2500 sq. ft., but there are none. The location and property/land are definately unique and beautiful.

Zillow offers a range currently between 600k - 750k currently, but they do not have details imo. Comps would be very difficult as none close by are as small. No repair necessary, maintenance for now. Current tenant is 4 yrs. I am very familiar with the property and friendly with owner. The owner does not want the responsibility and does realize the value but is widowed and has very large properties of their own, not income producing - for personal use. This is a very unique situation. The mortgage is 250k and they would like 50k at some point.

It can stay as is for the time being. I believe dormered - adding two bedrooms and bath would make it very marketable. This would offer an oppurtunity to open the current bedrooms to a main floor mast suite/bath.

My main questions refer to different methods of taking control.

Regarding your question, I believe a safe way to take control would be one of the following:

  1. assume loan, seller second, transfer title to you.
  2. put home in trust, take control, agreement for the $50k.
  3. L/P he home and transfer title when the $50k is settled.
  4. Same as 3 with ‘subject to’ paperwork.

Having said all that, unless you have deep pockets, I would consider buying a small multifamily in the same price range. If your tenant moves, you have 100% vacancy in this home with a narrow market to cure the problem. Sounds like there is ‘greed’ in the equation with the hope of a windfall profit upon the recovery of our economy. If you invested the same resources in a small apartment building, and someone moves, you still have other families to cover your expenses that live in the property.

An old, sick, and tired person could afford a vibrant, strong, and competent management company for less than 20% of the rent to manage this on his behalf. I don’t ‘buy’ the reason for his wanting to sell and would caution you on this decision.


Rob, I notice you just mention how to acquire the place, and would like a little more insight. Just thinking out loud here, looking for feedback. In that situation, wouldn’t getting a flex option with the seller and then assigning it to a buyer work, lessening the risk of holding the place? Of course then you just get a fee, correct? How else could you cash out on the equity without directly owning the place? Wholesale it to a public buyer with a back to back closing leaving 50K from the equity for the seller when said and done?

On another note, it would seem like the owner wouldn’t be that motivated - someone to cover the cost, and even equity to make selling through a realtor worthwhile. Have they offered the place to the current tenant?

I agree that taking an option on the property would be a good method to add to my list above. That gives you control for a specified period of time and then you can resell for a profit. The back to back closings could work if the end buyer has cash but would be problematic in today’s mortgage market if the buyer needed financing. You would have to check with a mortgage broker in the state where the property is located regarding seasoning requirements on the title by the investor/lender.

An alternative to back to back would be to find another buyer after your option is secure and then enter into an agreement with the original seller and end buyer for the higher price and submit an invoice to the seller for the difference to release you from that contract. Then there is no seasoning requirements to worry about with a lender and you can get paid with the invoice on the HUD 1 at a single closing.

Hope that helps.