Posted by rhunter(FL) on August 12, 2003 at 09:12:16:
Ron,
Yes, I can spell attorny, no…atorney. No, is it atorney? My goodness, I guess I cant. But anyway, thank you for the insight.
Rich(Tampa, St. Pete, FL)
Can I still buy it? - Posted by rhunter(FL)
Posted by rhunter(FL) on August 12, 2003 at 07:12:33:
This one is a little screwy. Got a call from a landlord that has a property she wants to sell. It’s a 3/1 in a decent neighborhood and she wants to sell it yesterday. So I meet her at and she explains that her mother had died in a fire in the property in 1998. The insurance company rebuilt the back half of the property and the thing looks brand new. She’s had the roof, the kitchen, the air conditioning ducts and unit replaced. She further explains that her aunt is renting the house from her for 400.00 a month but her note is 613.00 a month. FMV of the house is about 85k and properties are renting for about 950.00 to 1000.00 in this area. At this point I’m thinking the aunt/tenant can not afford this house and the niece/landlord is tired of paying the difference every month. So I ask to see the lease and it’s a document that the niece/landlord has drawn up and its not very sophisticated. The lease turns out to be a lease with option to buy. The option is 10k which is to be paid in 400.00 a month installments for 2 years. The lease was signed by both parties on 3/3/2003. Apparently the aunt/tenant has been paying the mortgage note, the taxes, the insurance, and the paying the niece/landlord 400.00 a month in option money which totals to about 1200.00 a month. I guess the aunt/tenant is paying her the option money whenever she feels like it but the lease does not specify when she is to pay it, just that she does every month. The niece called the aunt last month to ask when she was going to get her option money and the aunt told her she would get it when she gets it. That p*ssed her off and now she wants to sell because she feels that the aunt is in default. So I offer her 55k for the property and she accepts. Then I tell her to talk to her aunt and let her know what is going on. I now find out that these two are not on speaking terms and I have to talk to the aunt/tenant myself. I call the aunt/tenant last night to see where here head is and she tells me she doesnt know what her niece is doing talking to me because she’s buying the house and she has a legal document. I’m guessing she means her lease option lease agreement. The niece has told me that she will pay all the option money back to the aunt to be rid of the house. My question is should I proceed with this one or should I pass until the neice and aunt work this out? This document she created is really weak and I see tons of holes in it. You guys/gals have any advice? If I left any needed information out let me know and I will further explain.
Can you spell “attorney”? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 12, 2003 at 08:12:18:
Paul–(FL)--------------
This looks like a situation where you might well want to consult with a very knowledgeable local attorney who understands lease options.
If you purchase the house you are doing so subject to the existing lease-option, so you are bound to respect it.
If is a very poor document, you might not want to do that.
You do not mention the purchase price when the occupant excerises the option. What is it?
Wait a minute, are you saying you will pay $55K over and above the existing financing? That sounds screwy to me. And who is going to pay the difference between your $55K purchase price and the amount owed ont he loan. Oh wait, you don’t tell how much the loan amount is, do you? Well, if the loan amount is more than the $55K, who is to pay that amount above the $55K purchase price.
Hmmmm. Sounds almost like you are setting up as screwy a deal as the owner got herself into before. That is if the loan amount is greater than $55K, which is likely from the amount of the mortgage payment you mention.
Good InvestingRon Starr
Re: Can I still buy it? - Posted by paul-fl
Posted by paul-fl on August 12, 2003 at 07:21:37:
If it were me, I would let this slide no matter how good the deal was or wasn’t. Nothing worse then getting in the middle of family business. Just my opinion.