Deal Or No Deal? Opinions Welcome
DEAL or no deal? - OPINIONS welcome
Hello All,
My wife and I have been in RE for about 1 year now, and we are luckily beyond the stage of getting leads coming to us. The problems we still have, however, are knowing which methods to use (wholesale, Lease Option, Terms, etc…) when we get that lead, and most importantly letting the non-deals go. We tend to massage things maybe too long thinking it can be a deal if we just find the right method… Well we are hoping to throw a few of these on here and get some of your opinions out there as to some ideas on how to make the lead work, or letting it just die. Thanks in advance for all your opinions…
Lead:
We have a lead that came to us via our web page. She needs to sell as she is relocating. She has not used a realtor to date. She was not interested in a cash deal as we explained we only do those with a 20% discount when using Cash. She was, however, interested in terms which we explained might be a lease option or owner financing from her. We meet with her later this week. Here are the rest of the facts:
She has a 1st mtg of $150K
She is asking 150K
5Year ARM (4 years old) at 5.25% (yearly adjusting)
PITI and HOA = $1250
Potential rent could be about $1250 as it is a 3bd 2.5 baths in Denver (2-3% appreciation over last 2 years)
Comps support between 140K and 150K
She is not behind in payments and the house needs no repair
How would any of you work wither a lease option, or an Owner Finance type deal? Any suggestions on terms for either you would offer??
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Thanks again!
NO Deal,
Do a simple P&L
What does it cost to operate the property, include
Mortgages, Taxes, untilities paid by you insurance etc
then look at your rents
*look at your CAP rate - here is the math
Income in - expences = monthly income
monthly income x 12 = yearly income
yearly income x 10 = actual value of the house
Tom Knutson Minnesota
**Please See My Profile**
Wow. Some really great advice. Thanks to all of you. We just need to learn to get better at recognizing what type of deal makes the best sense (subject to, lease option, straight cash)
Thanks again!