Posted by Bashir on February 13, 2002 at 15:18:24:
Actually, if the seller would allow you to lease opt. with the right to sublet, then you could contract for the sellers asking price. Make sure your deal is assignable along with making it subject to finding a qualified tenant buyer in some time frame. Collect about an 8 to 10,000 option deposit and assign your lease op. contract to the tenant/buyer and get out of the deal. If you are giving the seller full price, try to get them to take a small option deposit. This will allow you to collect a bigger one from your tenant/buyer to pay the sellers deposit, and you’ll pocket the rest. Comps may need to be verified, but if you don’t know them it still shouldn’t hurt you too bad. If you can’t figure comps, check what the market rents are around that area. A lot of times properties will rent for close to 1% of their market value. This will give you an idea, but knowing the real value has to come from comps. You could also get it appraised.
I have a house that the owner wants to get rid of because he no longer resides in that state. The single family house is a 3bed 2bath, which is fairly good condition but will require a paint job on the outside and some touch ups on the inside. The owner purchased the property in 96 for $90,000 and now wants to sell it for $120,000 with a $2,000 allowance to paint the exterior. He currently has a tenant in the house that loves the house, but can’t afford to buy it right now.
An investor associate of mine told me that I should not offer more than $95,000 for it and that is cutting it real close. As I have been reading more into different techniques of aquiring these types of properties, I think that Lease Option or “Subject To” deals might be the way to go. If anybody has run across this type of issue please advise this newbie of which way to go, so that I don’t make a grand mistake or cheat myself out of a good bargain. Thank you…
Re: Which technique to use. Anybody please. - Posted by Enrique
Posted by Enrique on February 13, 2002 at 09:30:37:
Alex-
I agree with your investor friend about the price. Either one of those techniques could work. However, it sounds like you are unsure as how to proceed. I suggest that you get the deal under contract, and then either assign or partner up with your friend. With whatever money you make, buy a course or two so that, next time, you can do the deal yourself. Just my .02