Posted by JohnB_NJ on February 20, 2000 at 22:10:25:
Laure,
This last deal is a two year option. My T/B needs that much time. I priced the house at about 10k over market to offset the appreciation and the rent credit. I am getting a positive CF of $258 with no maintenance. Like I said, I recieved $3000 option consideration and a good sales price. My back end will put just over $20,000 in my pocket. And since this is a rental, I will do a 1031 exchange when my T/B is ready to purchase. I have had this property for just over 2 1/2 years.
The folks living there want to do many nice things to it and they understand that if they do not exercise their option the improvements remain. So, I am sure they intend to exercise their option but Hey, you never know… the last guy put in central A/C…
I started “selling” my rentals using L/O last year. Well, my first “buyer” wants out. I am so excited ! She put 2,500 down as option money, has paid her rent on time $595/ mo. for all of 8 months, put up a new fence and storage building, and now is getting married and wants out of her lease. YIPPIE>>>> I get to do this again ! OOhh… raise the price this time, get more for the house. Option price was too low last year.
She said, I lose my option money, don’t I? I said, yes, you do, but I will let you out of your lease with your 90 day notice, if you let me market it while you are still living there.
Posted by JohnB_NJ on February 20, 2000 at 20:07:54:
Hi Laure,
I know what you mean. I just had a L/O tenant write me a letter that he was moving out after 8 months. He always paid on time. He put in a brand new central air unit, painted the interior and put down $1500. Not to mention he had $2400 (300/month) in rent credit that he had accumulated.
Now I have a new L/O tenant who is paying more per month, $200/month credit, $3000 down and is paying me 10k more for the house since my last tenant left it in great shape with that new C/A unit.
I had the new tenant in the very next day…since I had a 30 day notice.
I love this business… and no toilets to fix with this house…
Posted by Bill K. - FL on February 20, 2000 at 17:31:06:
Most folks don’t know they can sell their option in this situation. However she would still be on the hook for the remaining months on the lease until the house closed. Sell it again.
How much is the rent that you are charging? And how long of an option? I’ve been giving two year options, but am backing off to one year now. Also, I am only giving 5-10% in rent credit per month, depending on the property, and what my “nut” is. I’ve gotten as much as 5k down on 50k priced houses, and as little as 1,000 down. I am upping that as I go, especially since this is tax refund time.
uh, no, they can’t transfer their option. It’s in my paperwork ! I have Bronchick’s L/O forms that I use. It’s just a wonderful thing He has all the angles covered.
He has all the angles covered.