Posted by nate baker on September 15, 2004 at 14:42:39:
You could offer to take over the seller’s monthly payment - that way they are not paying a double mortgage for the next several months - and offer to pay them 235-240K in 3 years. Then find a tenant who is willing to pay premium over the market rent in order to have the option to purchase the property in 3 years. The tenant’s option is to buy the house at the market value at the end of the term. You collect 5K from the tenant up front and $1600 per month. You pay the seller $1500 per month. At the end of 3 years if the price of the home is worth more than your option price and the tenant wants to buy the house, then you get to keep the difference. Plus you made $100 a month and got 5K up front.
Posted by Brian on September 15, 2004 at 14:02:16:
I had a call from a motivated seller that just moved to Houston. They have a vacant house that they bought earlier this year in Denver and must sell the home ASAP.
They are willing to sell it for what they owe, but they have no (little) equity.
Purchase Price = $235K
Owed = $232K
Monthly Payment= $1508 (includes PITI and HOA)
Market Value = $245-$250K
Rents are going at $1200 to $1400
Homes are sitting in that area for 60-90 days (Denver Market). Appreciation in Denver has been low over the past 2 years. Lucky if it is at 3%, but most likely it will be around 2%.
Can anyone make a logical deal out of this? If so or if not, please let me know your opinions. I’m trying to learn more about creative financing techniques, lease/purchase options. Also let me know if I need to provide further information.
Posted by Chris on September 15, 2004 at 21:07:34:
Well, my last one was a 6-Plex selling for 5 years’ n e t rents (after taxes, insurance, water, trash). This wouldn’t interest me at all - my $ 70,500 6-Plex gets $ 500 more rent
