Does this sound "worth it" (Newbie here) - Posted by Javier (MI)


#1

Posted by dave on December 01, 1998 at 18:46:25:

no this doesnt sound like a great deal here. 2 bedroom homes have a little less rental demand than 3, he isnt tired enough yet, he’s only 10% less than market value, since its a private deal, you should at least save 7% (commission) unless he offers a l/o in your best terms id forget it, or make him an offer anyway. did you qualify for a mortgage or are you pating cash. county records will tell you what he paid, when and the apprasied value.


#2

Does this sound “worth it” (Newbie here) - Posted by Javier (MI)

Posted by Javier (MI) on December 01, 1998 at 17:59:52:

Hello, I just happened to meet with the seller at the house, the specs:

2bd, 1bth, approx. 800 Sf. Lot size 43’ x 150’
2 car garage (manual), whole house fan (attic fan).
no roof problems.
approx $1,600 in taxes anually.
seller thinks can be rented for $ 650.00/month
He has a non-assumable mortgage, I believe I can find out how much he owes, same with insurance.
Houses are selling in the same block (3 br 1 bath) for $65,500-72,500 (with realtor involved) and $68,000 for a 2br 1 bth (with realtor)
this house I saw needs some paint (not from my point of view) and perhaps some cleaning to increase value.
The seller is tired of being a landord, and wants to put more time with family (son). I commented if able to go with a L/O and he mentioned he had a mortgage and he didn’t know if he could do it, for which I didn’t open my mouth because I don’t know either. But I consider that he may be flexible, he also reconsider a “not-much-lower price” for cash.
he is asking: $ 59,000.

I just don’t know how to structure.
Thank you for you replies,

Javier


#3

Re: Does this sound - Posted by Bud Branstetter

Posted by Bud Branstetter on December 02, 1998 at 16:51:07:

From a standpoint of buy and resell immediately there is not much promise. From a sandwich lease standpoint you have to determine. The goal is to have at least 100/mo positive cash flow. Low option $'s going in($1000) and 2-3K from the tenant/buyer. You also want a fair profit 10K on the back end. All of this you want without making a financial commitment until you find that tenant/buyer. One criteria that is helpful is to know your market. Both from the sales point(including future value) and the rental value.

My view is to avoid saying lease option to early. Simply ask if I leased the property long term would you give me the right to buy it. So if he would lease it to me for 3 years at $525(no minor mtce or vacancy on his part), wait until I find a tenant(for $650), $500 option and $500 prepaid rent, and a sales price of $57,000, then I would be interested.

There is no problem leasing a property if it has a mortgage. Most do. If he is willing to go this far then we start talking about land trusts, insurance and performance mortgages.


#4

I dunno - Posted by Redline

Posted by Redline on December 02, 1998 at 12:16:33:

“Houses are selling in the same block (3 br 1 bath) for $65,500-72,500 (with realtor involved) and $68,000 for a 2br 1 bth (with realtor)”.

You might want to check this fact again. How is it that 2BR houses are going for equal or greater prices than 3BR homes?

Also, this guy doesn’t seem motivated enough for me. And yes, you could do a lease/option or any other deal with a non-assumable mortgage by using Bronchick’s “put it in a trust first” method.

RL