Offer them what they owe on the house. You will pay the PITI only. They will sign a deed over into an escrow account and you the check sent to the lender will be from there.
They will also make the next 3 payments on the home.
They will also sign a power of attorney in case they get sellers remorse.
You will have them sign and then you will record a performance mortgage to stop them from further encumbering the property.
YOU will record an affidavit of Option on the home.
They will list you as an additional insured on the home and change their policy over to the landlord type.
You will carry your own insurance on the home (usually about 50 bucks.)
Your t/b will carry renters insurance on their property in the home.
If they do not agree to all stipulations then NEXT…follow up with a postcard once a month for 3 months. After they start making those double payments…then the whole ball game may change with their motivation. You will then be able to go take it subject 2.
what should I offer? Need advice please. - Posted by tampasteph
Posted by tampasteph on July 22, 2002 at 11:39:22:
Any suggestions appreciated.
FMV=115,000
3 bed 2 bath 1700 square feet. Great neighborhood, needs carpet in bedrooms, Mint condition otherwise.
PITI=789
mortgage balance=97,000 w/Countrywide
Market rents=900-1200
Sellers just moved into another house, and will begin making double payments(which they can’t afford) on the 1st of August .
They do not want to rent, use a realtor, or sell sub2.
They agreed to sell on lease option for 3 years.
We did not set a price yet.
What is the max. amount I should offer here?
I plan to sell on l/o $1,000/month rent, $5,000 option consideration. Strike price $125,000.
Seller also does not want to pay closing costs (very adamant about this).
Any suggestions on what price I should offer?
This will be my 1st, and I want to do it right.
Don’t worry about wrong, worry about profits. If the profits make you happy, you aren’t wrong.
Assuming you are correct in your valuation, your numbers look very good.
You might start by offering them $100,000 and work up to FMV if necessary. There is plenty of room in the spread. If you get your $5000 and the TB stays 3 years and walks, and you decline to buy or extend the lease, you walk away with $12000+.
If the TB buys, he pays the points in a double close and you walk with $10,000 plus the spread for the period he is leasing, possible 12 months (2400) for $12,400.