Posted by Paul on July 22, 2002 at 01:47:41:
your right, there is no financing in place.
Thank you,
Paul.
Best method of buying from this seller… - Posted by Paul
Posted by Paul on July 21, 2002 at 23:46:22:
What is the best way to do this?
I am dealing with a seller that has several rental properties, and has become a very tired landlord. Most of these properties are free and clear-no mortgages.
How would you suggest I buy? Lease/Purchase ? Try to buy subject to ? I need to structure a good package that would appeal to him as there are several opportunities in the balance.
My payment to him would equal his monthly income from the rentals as well taxes and insurance.
My exit strategy would be to Lease/Purchase to create cash flow and back-end profit, possibly converting some of the existing renters to Tenant/Buyers.
If I need to provide more information, please advise.
Thank you,
Paul
Re: Best method of buying from this seller… - Posted by KC Questions
Posted by KC Questions on July 22, 2002 at 01:06:50:
Well Paul, if the properties are owned free and clear, there wouldn’t be any loans that you could purchase the property subject to. Maybe you meant having him finance you.
There are a lot of people who preach that you should always “get the deed.” But in this case, lease optioning might also be a good choice. He is a landlord, so he is already used to leasing his property. You are merely tying that in with a purchase. If you go this route, you will want to lock in a price on the property, and negotiate as large of a rent credit as possible. The way I look at it, if you are getting a 50 or 100% rent credit, you can give him the price he wants for the property and you should still end up with a great deal. In this case you will be building “equity” a lot faster than any loan out there, regardless of if it is the bank or the seller who ends up financing you.
I do this on the properties that I lease option, but the problem that I run into is that most of them have a mortgage on them, so even if I negotiate a huge rent credit, when it comes time for me to exercise my option, if my option price is lower than their mortgage balance, they would have to pay money out of their pocket to sell the house to me. That’s not possible for the sellers that I deal with, but in your case, the guy owns the houses free and clear so that shouldn’t be an issue for you.
Re: Best method of buying from this seller… - Posted by Glen SoCal
Posted by Glen SoCal on July 22, 2002 at 24:55:06:
Paul–
The back end is up to you. The front end will be up to the owner. As Joe Kaiser says, “Get on the same page with the seller.” You’ll must first discover the needs of the seller (motive), find a solution that will satisfy his needs, and at the same time construct the deal so that it’s profitable for you too. How’s that for nebulous? You can’t structure a good package until you discover the needs of the seller. Get that info, come back here and post that info along with your question(s). With more info, you’ll get more useful responses. Good luck.