Looks like you have a good one there. I would advertise the property as a fixer upper. Let the buyer know that they can save $xx if they do the fix up.
This is what I have in mind. Get the property contracted for $90,000 with $0 down on your end. You pay rent of $1000 per month. Do a L/O to your tenant buyer at $105,000 ($15,000 below market for sweat equity). Take $5,000-$10,000 down and rent it to them for $1250 per month with $100 per month rent credits.
Of course there are variations as far as the amount you can take down, the amount of rent to collect, and the rent credits. This is just a guideline for you. I think this way will work out because you won’t have to do any of the work.
I?m new to the REI world and I?m trying to get started. I have found a townhouse that is currently vacant. And could be my first deal. Here are the specifics:
The owner owns the property outright and is anxious to sell.
He is willing to go with a lease/purchase option.
The property needs some cosmetic repairs however it is rentable as is
Others in the complex have sold for as high as $110k - $120k
The seller is considering a selling price in the 90?s
The asking price for rent is $1,150
Similar (clean) units rent for about $1,250 - $1,300
I am going to try to negotiate the rental price down to about $1k. Should I sub lease the place out at the $1,000 price or should I try to make positive cash flow from the property to make the needed repairs?
Or should I come out of pocket and make the repairs and charge the FMV for rent on the unit during the term? If I take this route I would assume that I would have to do the repairs while the place was vacant. Since I do not have a lot of cash on hand I?m a little leary about taking on the financial responsibility of doing the repairs while also being responsible for the rental payment.