First off, I am a new investor, or I should say a person who is working on his first deal.
Here’s the situation.
My wife’s grandfather has two rental properties, both are single family homes, which he owns free and clear.
He is not actively looking to unload those two properties as of right now, but I know if the offer is profitable to him he would at least entertain the idea of it. Both properties are 3 bedroom, 2 baths, with attached two car garages. Both properties have tenants.
My offer to him would be to lease option one of the properties to start off with and go from there. Unfortunately, my credit is just about as bad as it gets and my income as it stands right now will not allow me to begin the process of repairing it, although I am actively working on that.
I am looking for some advice as to how to structure the deal and any other financing option that I may have overlooked.
My first idea is to do them both. Them you can offer him hastle free income from the properties. He may be tired of managing the properties and not even realize what you can offer him. He probably would not give you a good deal if your wife was not kinfolk.
Are you trying to make cash flow from the properties or just get in and hope they appreciate? If you can get zero down and can cash flow a bit you can pay a higher price for the property. Try to get a low interest rate if you give him a higher price and that may help the cash flow.
I would like to have a steady cash flow from the properties, however, as of now I do not have the specific costs associated with the properties.
As of now, I believe the only option I would have on the properties would be to lease-option them. I just don’t have the credit to head out to a bank and inquire about a mortgage from them. Although, he may be able to finance it instead of lease-otioning it.