Should I sub2 or lease option

General Real Estate Investing
1

looking at a SF home with FMV of $65000
current owner owes $50000
they just want me to cover their payments, so either way i’ll be paying about $425, give or take.
i know i can rent out or lease/option to a third party at $625 and, in the case of the lease/option, sell it later for the $65000.
to bring the property up to my standards, it would take about $3000.
the current loan is a balloon that will come due in 3.5 years. i would plan to refinance well before that anyway.
this would be my first time buying with lease option or sub 2, and i’m not sure which way is best. i could go get conventional financing, but i’m trying to avoid the closing costs for the time being. plus, if i don’t rely on my bank financing, that leaves me more leverage to buy other deals.

any help would be appreciated!

2

Whoever is own the deed controls the deal.

Wouldn’t you prefer to control the deal rather than the seller?

Woudn’t you prefer to know when the homeowner gets new financing on the property, or doesn’t pay the taxes, or files for bankruptcy, thus royally screwing up your resell strategy?

My vote, get the deed!

Raj

3

thanks raj! i was leaning that way too, but being a newbie, i wanted to throw it out there to make sure there wasn’t something i was missing.

appreciate the help!