Posted by Dan Moody on December 03, 1998 at 21:35:39:
I have a Lease/Option w/ right to sublease as well…unfortunately, I have to pay the mortgage whether or not I have a tenant in it…in less than 30 days- $1170 a month-OUCH! It would help me to know what language you included in your option contract to eliminate that risk. I have since done another contract, but all I could do to avoid that element of risk was reword the contract as an “OPTION to LEASE/OPTION or PURCHASE”. This gave me the option to lease/option or purchase but not the obligation…down side is that it doesn’t take it off the market- if the owner finds a buyer, I’m done. Your basic trade off…what suggestions can you offer?
Posted by Jim_NC on December 01, 1998 at 14:01:18:
I just closed a deal on a house that I acquired from mailing out letters to the homes listed for rent in our paper. The seller called me and said he had received my letter and was interested in my proposal. He has had the house for sale for 6 months and had decided to rent it because he is moving into a new house he just built on December 11th. He said his pmt was $1200 per month and that is what he would have to have for rent.
I told him I would drive by it and get back with an offer. I pulled up to the house and my jaw dropped into my lap! This is a 4000 sq ft exec home! I’m thinking…“There is no way this guy will rent this house for $1200 per month”. I got back and called him and offerd $1000/mo(just to see what he would say) and he said “I am going to have to have $1200”. I’m thinking to myself “no problem, where do I sign!” This house will rent for $2000/ mo easy!
Here are the numbers I have ended up with on the house:
sound great! just a couple questions if i may, i’ll assume you scanned ads that listed an address of a rental, most i see just have phone numbers, and how much of the rent is option money, what did you put down? thanks, curious dave
Re: Christmas Has Come Early!!! - Posted by Dale(OH)
Posted by Dale(OH) on December 01, 1998 at 18:44:58:
Jim, Congratulations, I love to hear a good sucess story to keep my self as well as all the other newbe’s motivated. Good Luck and Happy Holidays to you and yours.
WOW Jim!! You mean people really do rent for that much money… After you make the deal how do you get the renters quickly. Just by a simple ad in the classifieds? Or do you start putting ads in the paper for the property before your deal is done???
Re: Christmas Has Come Early!!! - Posted by Jim_NC
Posted by Jim_NC on December 01, 1998 at 15:47:18:
People will not beat the doors down to pay $2000 per month for rent. But for this house and the area it is in it should be no problem to get that. As far as advertising…I will put an ad in the paper for an Exec home and put signs in the yard and neighborhood.
Re: Christmas Has Come Early!!! - Posted by Millie I.
Posted by Millie I. on December 01, 1998 at 16:36:07:
Jim,
Did you assume that the house would rent for $2000? or did you research the going rent in the area and came up with this conclusion?
What are the demands for a $2000/mo rental house, hot or lukewarm or cold. How long will it take you to get it rented while you are paying $1200/mo to the owner?
If the seller cannot sell it for the asking price in 6 months, how do you propose to sell it at a higher price?
Do your homework before you sign on the dotted line.
You could get hurt if you don’t.
Re: Christmas Has Come Early!!! - Posted by Jim_NC
Posted by Jim_NC on December 01, 1998 at 16:45:07:
I did the research on the area and for this type home in the area it is in I will have no problem getting that. The area I am in is a booming place with a big demand for rent to own homes. That is how I will sell it because I will be offering something the seller was not…RENT TO OWN. I am getting $1400/mo on 1800 sq ft homes right now, this is 4000 sq ft.
As far as the paying 1200/mo until I get it rented…I am not responsible for paying the rent until I have found a suitable sub-tenant. This guy is just wanting to do something with the house because he is moving out of it on dec 11th and does not want to fool with being a landlord. At $800/mo profit I don’t mind doing it for him!