Buy on contract? New to L/O... - Posted by Drew

Posted by KC Questions on July 14, 2002 at 22:04:33:

Have you considered a lease option? Maybe you could lease option the place for a year at $500/month. That would give you a whole year to determine if you really want the house without a 20 or 30 year commitment. If the seller is truly motivated, they might consider that since you will be handling the management and repairs. The good thing is, if you later find that this is a house that you really don’t want, you can walk away after your 1 year lease is up.

Buy on contract? New to L/O… - Posted by Drew

Posted by Drew on July 14, 2002 at 18:08:54:

I found a house that was converted into a triplex, it’s an older home that just needs a little cleanup (paint, yard cleanup, etc…). But it has good cashflow. I would like to aquire it and get some good cashflow, so I’m trying to figure out the best way to approach the offer.
Here are some details,

Asking price: 59,000
Current rental income: 3 units @ 125 a week (about 1500)

My first thought is, why would the owner want to sell this property? It sounds too good to be true, but I’m told from his handyman that he has too many properties (and not enough time) and he is trying to sell some to have extra money? I have put in my time looking for motivated sellers.

OK, so I could go to the bank and get a basic loan with 6% down and carry the loan for around 400 + insurance and taxes. I would still come out ahead. But, I would like to consider buying on contract. The seller is suppose to be very motivated, so I would like to present an offer to buy on contract. Since his problem is the managment of all his properties, I could give him a down payment (something well under 10%) and offer to pay a fixed dollar amout per month? I would try to get into a contract to pay 2k down, 500 a month for one year and then have the option to buy in 1 year at 55K? Then see if he’s willing to play? Am I crazy or would the buyer be crazy to accept? I’m approaching it as if it were a regular house for sale at 60K, not taking into consideration the rental income. Any thoughts?