Posted by LeonNC on February 09, 2001 at 21:10:28:
Rhonda,
I think it depends on what you want from the deal. If it’s a large back-end of the deal that you’re looking for then only do the ones you can get at a discount and mark it up.
I’m aware of some people who try to build a nice back-end into the deal but are more interested in the cashflow and what they can get up front. If the house has good cashflow there’s probably some equity.
I’ve had opportunities to sandwich lease houses with large payments but passed. The control without ownership is nice and I take that into consideration but I just don’t like being on the hook for large payments. Maybe a few but I’m not looking to make a habit of it. The risk has to be worth the reward.
You can always make your tenant/buyers purchase price a set price or what it will appraise for which ever is higher IF AND WHEN they excercise the option to purchase.
Posted by Rhonda(NC) on February 09, 2001 at 19:03:22:
Great Site.
I have a question concerning L/O. Everything I read seems hinged on the ability to buy at a substantial discount.
The area I live in has been appreciating at a 6% rate since I moved here and bought my home that I live in now. Purchased in 11/92 for 63K. Current appraisal 100K
In an area with solid growth couldn’t we go after L/O with the approach of getting sellers just 3-5% off of the FMV, turn around and put T/B in the house with a 6% rise in price for a 1 yr L/O. As long as we get a good amount for option consideration up front, and can cash flow 100 a month
Do we have any pitfalls other than the usual associated things, DECLINE in prices, Higher rates, Deadbeats etc.
Any thoughts or comments would be welcomed.