Posted by B.L.Renfrow on November 03, 2000 at 15:16:32:
Rajen, unless I am missing something, this is a TERRIBLE deal.
First, you need actual comps…not a single Yahoo search. The best way to obtain valid comps is to either ask a RE agent to run them for you on recently sold property, or go to your courthouse, get the recent sales yourself and then get in your car and start driving.
You say the seller is willing to sell for $74,000. But he owes $86,000. If you exercise your option next week, or next month, is he going to be able to show up at closing with the $12k difference? I wouldn’t bet on it.
And WHY on earth would you consider giving him a $4k nonrefundable option consderation? Option consideration is something you should COLLECT from YOUR tenant/buyer, NOT something you PAY. In fact, this seller should be paying YOU to solve his major problem for him here.
Next, notwithstanding the above issues, what about this potential tenant located by the seller? Is he qualified as a tenant/BUYER? Is he even interested in buying? And if so, HOW MUCH option consideration is he able to come up with? Furthermore, as a T/Ber you should be able to collect above-market rent from him, since you are giving him good terms.
If you are convinced there is a deal here, several Atlanta-area investors frequent this board. Perhaps it would be helpful to contact one of them directly…maybe they know the area or would otherwise be willing to offer location-specific advice.
Finally, I will go ahead and e-mail you seperately Bronchick’s lease and option agreements, since you are having trouble downloading them from his site. They are in pdf format, so you’ll need Acrobat Reader on your computer to open them. But PLEASE…think twice, or three times, before you USE them on this deal. Unless I have overlooked something, there is NO deal here.