Please review my deal. Thanks!! - Posted by Mike (IN)

Real Estate Investing
1

Posted by Mike (IN) on February 28, 2001 at 13:44:35:

Charles,

That’s a great idea about the repair & credit. I’m going to try that!

Mike

2

Please review my deal. Thanks!! - Posted by Mike (IN)

Posted by Mike (IN) on February 28, 2001 at 09:01:17:

Please review and let me know if I missed anything. Also, please feel free to advise if you would have done anything defferently.

Here’s the deal - ; (student of Bronchick - Lease/Option & Cash Cow Course)

Acquired a home using Bronchick’s lease/purchase form.
FMV = $65k (got copy of appraisal from 1 year ago)
Lease/Purchased for $50k (36 mos term)
put $1,000 option money down
monthly payment to him $400
Possession 3/1
need to repair a “flashing” problem with the roof over room addition ($600)

Found tenant/buyer
sold on lease/option for $69,900 (12 mos term)
collected $2,000 option money
their payment is $675
Possession 3/1

Forms used with seller;

  • Used Bronchicks’ lease/purchase form with the seller
  • recorded a memo of the option
  • had seller sign “authorization” release form for his mortgage
  • verified his mortgage balance to be $30k and all payments current ($283 per mo)

Forms used with tenant/buyer;

  • Lease with separate option to purchase
  • Lease/Option disclosure form (CYA)
  • lead based paint disclosure form and pamplet

Anything else I missed? Please advise!

Thanks
Mike

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Re: Please review my deal. Thanks!! - Posted by Terry (Houston)

Posted by Terry (Houston) on February 28, 2001 at 10:21:57:

I have not bought on a L/O but can you talk the seller into escrowing the closing docs so that in the future he doesn’t ‘decide’ not to do the deal? Or if something happens to him hie family doesn’t think you took adantage of him?

I sell on the L/O as well as a CFD and I do not escrow the doc’s per Bronchick’s forms when I sell. But buying i would want to secure the position better.

Great job on a great deal though. $20,000 backend is nice huh?

Terry

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U Done Good - Posted by Charles Steed

Posted by Charles Steed on February 28, 2001 at 10:04:17:

Looks like a nice one. It’s nice to see someone doing L/Os who isn’t chasing tiny little equities. One suggestion that might keep some money in your pocket. Show your tenant the repair estimate for the flashing and tell him if he has the work done (within a specified time frame) you’ll credit him an additional $1000. That way you minimize you cash outlay and your tenant gets a good return for money spent. Win/win. Go find another.

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Good Thoughts, Terry! - Posted by Mike (IN)

Posted by Mike (IN) on February 28, 2001 at 13:42:57:

Thanks for your comments! Yes, you’re right…I should escrow the documents like you said. I’ll have to look into that in more detail!

Mike