Posted by Rob on July 22, 2002 at 12:20:46:
Buck,
The contracts for an L/O say that we will be renting it out and guaranteeing the seller’s PITI being paid (Bronchick’s L/O course)
Question on a home for Rent !?! - Posted by Rob
Posted by Rob on July 22, 2002 at 08:47:41:
I found someone renting their home for $2300. Now, if I pitch them an L/O and they like the idea, BUT, they expect a $2300 check each month for the rent, how do I work it that I pay their PITI ?..Do I cut them a check for a piece of the difference?
I’m not as concerned with cash flow as I am with option money and back end profit…
Any ideas?
Thanks !
Re: Question on a home for Rent !?! - Posted by Buck
Posted by Buck on July 22, 2002 at 12:12:51:
Rob,
If you are leasing the property, they are the owners during that time and make all the payments: Principal, interest, taxes and insurance. You don’t pay those.
Also you might consider a lease closer to the owners actual cost with you providing all maintenance up to $200. Your TB will then have to agree to pay all maintenance up to $200 leaving you clear from obligation.
If you buy subject to, then you would pay the piti.
Buck
Re: Question on a home for Rent !?! - Posted by Clair-MO
Posted by Clair-MO on July 22, 2002 at 09:49:32:
Robert, Why pay a $2300 per month rent when you can negotiate a lower price then you can meet PITI for the property. How are you are going to have any positive cash flow? If you don’t have any positive cash flow to put into your pocket per month, Is the property worth trying to purchase on a lease option?
Remember the rule of thumb: Everything in REInvesting is “negotiable” if not walk away!" It is a numbers game, Robert.