Seller wants out of Landlord...asking price is good but I DON'T KNOW MY NEXT STEP! - Posted by Lois

Posted by SandyFL on May 31, 1999 at 10:59:49:

just a little brainstorming… these are just off the top of my head, hopefully others will join in …

What if you pointed out that his getting a monthly income without the headaches of landlording might be good? (owner financing or lease option)

What if you pointed out the capital gains tax he would have to pay when he sells all five at once?

What if you got all 5 under control, flipped two of them and used the money to help finance the other three? Do you know anyone who wants to buy a 3/1 now and has cash to put down? Do you have any comparable sales info? (where are you, just curious)

Whatever you work out with him, keep emphasizing the income without headaches part of it. That is what he said he wants, the money without the problems.


Seller wants out of Landlord…asking price is good but I DON’T KNOW MY NEXT STEP! - Posted by Lois

Posted by Lois on May 31, 1999 at 09:44:39:

Hello All:

Here’s the situation.

A seller asking $109,000 for 5 (five houses!!!)3br/1ba. He owns free & clear. I ran comps & his asking price is about 20% below market value. He’s a tired land-lord who is moving with his family to another state. He just wants his kids to have a good education in this other state. He wants cash up front but is open to any other deal.

Since there are no mortgages in these properties…could the owner refinance for me?? even if I have bad credit??

These five home are rented, bringing him a monthly total of $3,150.00

Is this a good deal?
What is my next step?
How should I present him the deal?

Please help.


Re: Seller wants out of Landlord…asking price is good but I DON’T KNOW MY NEXT STEP! - Posted by B.L Renfrow

Posted by B.L Renfrow on May 31, 1999 at 12:48:25:

So, each property has, on average, FMV of around $26,160, right? ($109k divided by 5, plus 20%.) And his average rent per property is $630. Of course, it’s hard to say without knowing the area, etc., but that seems pretty high given the value of the properties. I’d want to see his leases or confirm with his tenants. Any repairs needed?

You say he wants cash up front. Of course he does. They all do, at first. The real question is what does he NEED? Then you can work on getting him what he really needs, which sounds like might be simply to rid him of the responsibility and headaches of landlording.

I like giving sellers a choice and letting them pick the best one for their situation, rather than a take-it-or-leave-it offer. “Mr. Seller, I can see several ways in which I could help you out. Just let me know which would work best for you.”

  1. Offer his asking price, nothing down, in exchange for seller financing at reasonable terms. Get each property under seperate contract though. Then, unless you want to be a landlord, offer the properties on a lease-option to the current tenants.

  2. He probably won’t go for that, but it doesn’t hurt to ask. If he insists on a down payment, offer less and then flip a couple of them to obtain cash for down payment.

  3. If he truly has a need for lots of cash up front, he could refinance to pull out cash, then you take title in a trust “subject to” his notes, as many others on this site have described.

  4. Lease-option.

Of course, I’m sure there are plenty of other possibilities. As the post below points out, make sure the seller is aware of the tax consequences of selling all five at once, for cash.

Just a few quick thoughts…my cerebral functions are slowed by the temp outside today! And, I am relatively new at this, so it’s possible I have no idea what I’m talking about!

Good luck…

Brian (NY)