Lease Option Offer On My Home - Help
Thank you to all who responded to my situation.
It turns out that we will be dealing with an independent investor who wants to lease option our property under these terms:
As soon as he can find a tenant to sub lease the home he is offering...
* $4000 cash up front (down payment)
* Monthly payments to cover our mortgage payments for 5 years whether he has a tenant in it or not.
* He is responsible for maintenance and repairs.
* At the end of the 5 year term if he chooses to exercise his option, he pays off our mortgage, we pay for the title transfer - The end.
We have about 11k equity and have to move out of state within the next month. (I am a motivated seller)
This is the only offer we have so far and it seems like a good one.
Any comments or suggestions???
Thank you!
mettinvest
Thank you all again.
An update...
The investor wants to take money off the initial down payment to buy a new garage door. (The extisting one is in good shape, it's just older)
We are looking at some of the things that we have as negotiating leverage...
* Including appliances, deck furniture, etc.
To be honest, I am letting a degree of fear of ...not finding another tenant who will be able to give us the money down we need to move, paying the rent on time and trying to manage the property from 2500 miles away.
Help me get a grip and out of the emotion of it all.
Is it possible to scare an investor away with too many "negotiations"?
Thanks everyone!
mettinvest
I say go for it, but here are a few things you might want to do. You should be getting at the bare min. of 2% of the homes option price from the investor as the option payment (His $4000 down). He is taking care of repairs and that is good, some investor will try to make you foot the bill for expensises over $200. If you do not trust him to make the payments then you have a company that will get the check from your buyer and pay all the bills, I forget what the name of such a company is, you would have to ask around here to find out. And if he doesnt decide to exercise his option in 5 years you keep his $4000.
Best of luck,
James
Speaking from the seller's point of view (yours in this case), here's what I'd want.
First, he either L/O's from you or not. There would be no "subject to finding a tenant", etc. He gives you the option payment and makes the monthly as agreed, period.
Second, you need to either collect his rent and pay your mortgage yourself, or you need to setup an account with a 3rd party company to handle this (and add the fee to the monthly payment). Don't rely on this investor to make your payment unless you really, really feel comfortable with that.
Third, I wouldn't accept a reduced option fee, especially to "repair" something that doesn't need it. I seriously doubt that this investor will change the door after he has possession.
Fourth, remember that with a L/O, you are still the owner of the property. While him accepting responsiblity for the repairs is good, you need a way to verify that he is actually doing that and if not actions within your contract that address the problem.
Roger