I have an opportunity to buy a house and immediately sell it to my wife’s coworker through a land contract. Currently her credit score is 580 and her mortgage broker says in May 09 she will be able to have a traditional mtg. Here are the other specs:
I can purchase the property for $35,000
$4,000 in buying some appliances and doing minor repairs are needed
She can only afford $50,000
She should only need the land contract for a few month, unless I convince her otherwise
How would I set this up to make it a win/win or should I abandon ship?
Basically, the house after the repairs in a tendor market should sell quickly at $65,000. This is a great deal and that is why she wants to act now. I have actually looked at the property twice before to do a flip or rent.
The whole thing with her credit score is still a little vague to me. I believe she went through a recent divorce and then just rec’d a major increase in pay (this was not included in her most recent visit to the mtg broker).
So, I believe I am going to buy the home. Rent it to her until her credit is good enough to buy me out. Then sell it her with all my expenses plus a decent profit and 8% interest.
So, I believe I am going to buy the home. Rent it to her until her credit is good enough to buy me out. Then sell it her with all my expenses plus a decent profit and 8% interest.
So basically what you are looking for is to do a Lease Option, with the option being for 5-6 months. No need to go down the Land Contract route.
monnchew, You can learn a lot on the Lease Option forum here. Just search and read. There are plus’s and minus’s to both Land Contracts and Lease Options. You’ll figure out whats best for you. Herbster
The vast majority of people who “buy” a house with a lease option or land contract never actually buy the house. Therefore, it is CRITICALLY important that this property cash flows properly as a rental. What is the market rent for this property?