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.”
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.
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.
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.
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!