Posted by Chris on January 30, 2000 at 17:11:08:
You can go over to www.cal-equity.com (that is Bill Gatten’s site). There is a price listing and you can e-mail Bill. He also has a book that you may want to buy available from the site.
You can also read a few articles Bill has at the creonline site in the How To articles section.
-Chris
Lease Option question - Posted by David
Posted by David on January 28, 2000 at 11:44:24:
My cousin wants to sell his house. He has asked me if I want to buy it. I haven’t ever done a lease option, but they said they would consider my offer. They are trying to avoid a real estate commision. The FMV of home is probably $100,000 to $110,000. They owe $96,000 on a 30 year loan. PITI is 785/month. They said they need $8,000 cash to get into their new home. Anyone got any suggestions? Thanks in advance
David in Georgia
Re: Lease Option question - Posted by Tom A, of PA
Posted by Tom A, of PA on January 28, 2000 at 17:24:13:
David,
Let’s see… Well to begin with I will be doing this from the point of protecting you.
I would do my own comps to find out the real FMV… not probably… 100-110K. You are looking at taking over a mortgage of 96K and paying them 8K… that’s 104K and if the FMV is closer to the 100K range then you may be saving them the realtor’s commision, but you are overpaying for the house. Seems one way for them.
I would not do a lease option if I could do something else. I am assuming that you have the 8K they want, if not you will have to let me know what your financial position is in this. I’m guessing that you are attracted by the “ready made” financing that is there.
I would try to do a purchase agreement with a “subject to” the existing financing. This way you could have the deed prepared and given to you or put into escrow (again assuming that recording it may trigger the due on sale clause). Give them the 8K down and take over the payment book. The loan would still have their name on it (just as it would with a lease option), but the deed would have your name. Hey, they are getting their 8K and saving the commission they wanted. You are getting the house and the financing you want.
I again assume (I know dangerous) that you want this for your own residence. If it is an investment, there is not enough equity (or any at all if the 104K is more than the FMV) to do this deal. Just because it is available does not always make it a good deal.
Hope this helps
Tom A. of PA
Re: Lease Option question - Posted by David in GA
Posted by David in GA on January 28, 2000 at 20:22:01:
Thanks for the advice. It is not going to be my residence. Today I found out that the house that they are wanting to get into is vacant and the seller is willing to do a lease purchase on it too. Now they don’t need the 8K like they thought. Any suggestions on how to structure this would be appreciated. They don’t have a clue about lease options, They just love the house that they are looking at. I would say motivated. Any advice would be appreciated.
Re: Lease Option question - Posted by Billm
Posted by Billm on January 29, 2000 at 10:11:34:
this is perfect place for the “land Trust”. See Bill Gatten’s 'Pac Trust" info. removes the DOS issue, protects both you and seller, and it’s extremely flexible as to how you two agree to “split” equity… in the beginning, and at termination of the trust. Plus, you do NOT add more debt to your ratios, etc.
Re: Lease Option question - Posted by Phillip
Posted by Phillip on January 29, 2000 at 14:35:58:
I want to consider doing business with the PactTrust people but remain unclear as to the actual cost, who pays it, and what monthly expenses are connected with an average deal. From postings here I have learned a little about it, but want to know did you actually do a deal with a PactTrust. If so, please share your experiences…