Posted by DougO(NM) on May 29, 2000 at 16:45:27:
This sounds like an exellent opportunity to lease with an option for the whole property. Sell him on the fact he won’t have any management headaches whatsoever. You will take care of everything. I assume the place is Free and clear, (no debt) so get together with this guy and figure out what the land is worth, then agree on a price for each home. Then get an option drawn up to buy the land and the homes, get the price agreed on today, then get the longest possible option term you can get. Your consideration for the option to purchase will be your performance on fixing up the homes, cutting the grass, etc. Next, agree to lease the place for what ever you can make a profit at, but your payments don’t start until you have got everything cleaned and fixed and rented. For example, if you could get $800 per month, make your lease payment $500 or something you can both agree on that is fair to you both. Remind him if he gets too greedy that this is probably cheaper than hiring a caretaker, especially since you will more motivated. Recap: Lease long term at a lower price than you can get form your tennants, option to buy long term at todays price. The lease and option are seperate documents, and you want the right to assign your interest, especially in the option.
Go get 'em