Sorry thurman if I wasn’t clear, first you need to find out if the seller will take a lease option (for you) you would lease the property from the seller with payments equal to the current mortgage payment, then sublease the property for the mortgage payment plus $200. your option to purchase the property would be for the mortgage balance, approx $40,000 but you would then option the property to your tenant/buyer for the full market value approx $65,000. You don’t need to qualify for a mortgage because your not buying it and holding it your lease/optioning it and then sublease/optioning it. This only works if the seller is willing to lease it to you until it sells. I hope this clears it up somewhat
3bedroom, 2bath, 7 room modular house on 1.5 acres in rural area. The house is 10 years old.
Seller will take just what is owed to local bank who has the first mortgage ($40,000). Seller’s motivation is debt relief and don’t want the house.
The house needs repairs:
New siding (previous tenant’s kids shot holes on all sides of the old siding with a BB gun). I wonder how the kids missed shooting the windows.
New carpet thoughout the house.
Septic tank system may need to be replaced or improved. It will overflow when the people living in the house uses laundry powder instead of liquid laundry soap (that what the seller tells me). The seller had the septic tank cleaned out 2 years old.
General cleaning and painting of the interior of house.
Total fix-up cost ($12,000)
Fair Market Value after needed repairs ($65,000).
I have about $3,000 cash. I cannot qualify for a conventional new loan.
I plan to sell house through a lease-option program for a quick sale.
Any ideas as to how to do this deal? Thanks in advance for your suggestions!
Re: Need your creative ideas on this deal. - Posted by Curt Darragh
Posted by Curt Darragh on March 23, 2000 at 16:38:19:
Thurman,
You need to get more info, but it sounds like a good sandwich L/O. Find out what the sellers monthly payments are. I would offer something like this: Option to purchase $40,000, rent = to mortgage payment, for as many terms as possible. Then lease the property for about $200/mon above your rent with little down ($1500 - $2500) and have your tenant buyer do the repairs for a down payment credit. Option price $65,000 minus repair credit. This way you get you some money up front, some positive cash flow, and money out the back. The seller gets the debt relief they need and if your tenant/buyer backs out you have a repaired property that you can sell or L/O again.
Re: Need your creative ideas on this deal. - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on March 23, 2000 at 16:34:17:
It might not hurt to ask the lender if they would agree to allow you to take title to this property “subject to” the existing loan. I once did this and was successful in a situation where the house had deteriorated some and there was a question as to wheather the security was worth the amount still owed on the note. This was a small town bank and I made an appointment to see the president of the bank to ask my question, it worked…ED
Re: Need your creative ideas on this deal. - Posted by christopher
Posted by christopher on March 24, 2000 at 10:24:53:
what you suggest doesn’t make sense to me. The buyer has only 3000 bucks and can’t get a mortgage presumably because of bad credit. And you said “Option to purchase $40,000, rent = to mortgage payment, for as many terms as possible”. The seller wants out…debt free! This buyer cannot get a mortgage…and the seller will not want to hold, therefore, the buyer will not acdept this deal. am i missing something here? can you explain your strategy further???