Do These L/O #'s Look Ok?
Asking price is $140K
$4K consideration
$1300 per month
I further L/O to TB for
160K
10% down (?)
$1600 per month
ret credit of $150 per month(?)
1 yr with 1 yr extension / renewal option
assuming 24 months
= $16,000 upfront
$150 PCF from rent x 24
=$ 3,600
balance =$140,400
profit =$20,000
PS. If I am doing a sandwich L/O, should I have a title search etc all done b4 I further L/O it,could I just do this along the way, or is the owner/ seller obliged to disclose EVRYTHING on P & Sale agreement anyway?
Hi,
Personally, I think your numbers are a little aggressive. I would think your tenant/buyer could put up 5% of the purchase price, or $8000 using your current scenario.
Can you justify the $20,000 difference between your purchase and sell price?
Buyers are likely to have some idea of the market in your area and may be turned away if they don't feel the end price is a worthy investment.
That was my first impression from looking at your scenario, but I'm sure others may have a different spin on it.
Good luck!
somebody?lol sorry to sound pushy, I have seller phoning me at 3pm is all.
thank you
Aghh, I jumped in same time again, pardon me....yes, I was wondering bout my 10% being a little high. Although the right person may just not have means to qual for a reg loan so I am open to neg on that anyway.
Further, the 160K can be justified again if the TB cant get a reg loan anyway, as above,particularly if the term is 3 yrs instead of 2....this sound better?
thanks
As the old saying goes, "whatever the market will bear." You surely know your area much better than I do. I was just thinking if you wanted to get someone in there as quickly as possible, you might want to adjust your terms a bit.
It sounds like you already have some interest brewing though, and that's good.
Thanks for your input, seller just phoned me....turns out the home is located in very 'go ahead 'area we drove around in last weekend.
Im gonna chase this rabbit.
the Mrs
My 2 cents:
10% may be higher than most TBs are able to go, but I imagine that there are plenty out there who do. For example, here in Sacramento, if your home is foreclosed on, it's most likely going to be bid up so high that you'll get some dough out of it, but certainly wouldn't get another mortgage for a while. As far as the higher asking price, that's perfectly logical if you're in an area with greater than average appreciation rates (CA, Las Vegas, etc.).
Curly,
Your question:
1) If I am doing a sandwich L/O, should I have a title search etc all done b4 I further L/O it,could I just do this along the way, or is the owner/ seller obliged to disclose EVRYTHING on P & Sale agreement anyway
I would definitely have a title search done by professionals or myself. You need to make sure that the title is clean. I have the l/s sign the lease then I do a title search. If something comes up not to my liking, the lease agreement is void. Of course you do the search right after you have the lease puchase signed. Don't delay..
On the subject of down payments. I agree with the above, way too much for down payment. Typically, you could expect 10% down for a land contract, but will be defficult for l/o. The general rule of thumb is 3-5% down for l/o. So of course, you want a much lower down with your l/s.
In my area, investors are switching to lease options because they can't get 10% down with their subto deals. In phoenix/tucson, a lot of investors are offering zero or lw down down l/o's!
Best Regards,
Bginvestor