Posted by Nathan(oh) on July 16, 2002 at 08:48:12:
I assume you are talking about the time when your buyer is ready to get an actual loan for the property and cash you and the owner out. To do this is is similar to a wholesale flip. You would do a double closing. You would close with your buyer and with your seller in seperate, but back to back, closings. The other alternative is to assign your contract to your buyer right before closing and have them pay you the difference, but that is a last resort.
I am currently working out the specifics on this lease purchase deal:
I will make the payments on this house with the option to buy for what they owe approx $128k. The house fixed up is worth about $165k and I estimate repairs to be about $7-$10k. My idea is to sub lease to a qualified buyer/tenant at an option price around $165k. The sellers are motivated because they are buying another home and need out on this one. My question is how is the closing handled? I would exercise my option to buy at $128k and my buyer/tenant exercises his option to buy at 165k? Would it be best to bring in a partner who is experienced in these types of deals? All of my previous rehabs have been funded through bank rehab programs. Any advice on this deal is appreciated.