I have a seller that I am talking to. She has a one bedroom, one bath condo in San Diego. She wants to sell it. It is currently vacant. Her loan balance is $225,000. She has a 30 year fixed loan. Comps for the condo show it to be valued at $225,000. Her payment is $1823 plus HOA of $200 for a total of $2023. The condo is in good condition. She is current on her payments. Market rents are about $1,000 per month. What can be done with this? If I did a subject to deal, what would be the exit strategy? Is this a lease option candidate? If so, what would be the exit strategy?
There’s no equity to start. How do you plan to lease option if the market rent is HALF of the mortgage and HOA fees? Add the other expenses of renting and you’re even more upside down. This deal frankly sucks. Find another deal.
The numbers you show give almost know hope to doing either a Subject2 or L/O. There are basically two options you could do -
1- Sandwich - in other words, you have to find a ready T/B who is willing to pay $2200/month, get $8k down with a selling option of $260k. If that is possible, then you have a skinny deal there. To do this you pretty much have to have a solid T/B in hand ready to go. You negotiate the deal to simply take over payments - whether on S2 or L/O
2- S2-L/O - put it on a nonexclusive option to see if you can find a buyer for above. That way seller can keep selling while you see if you can find a buyer for above.
The key are what are the chances you will be able to find a T/B who would be willing to pay that type of money (or better, of course) for this type of unit in your market. If you can - work it and see waht happens. if probably not, go find a better deal.