Lease Option Or Wrap Around Mtg?
I'm working on my first deal and this is what I'm looking at:
I have a motivated seller in NH that wants to sell or lease option his 3 family.
1st floor = 2 bedroom(+) renting at $1200 (tenant currently pays $1050 and does most of the yard up keep but not all)
2nd floor = 1 bedroom currently owner occupied. Should be able to rent out at $750
3rd floor = 1 bedroom rented to current owners nephew at $650.
Currently heat and hot water are included with all of the rents. All of the apartments are in great shape and have recently been done over. The heating system could definitely be split into three boilers and therefore not be included in the rent. Roof needs some repairs and boiler may need repairs within the next year or two. Everything else about the building looks really solid. The reported expenses with taxes etc. is aprox. $5000/yr.
This is being offered by the owner with no realtor. He's asking $302,000. I'm cash poor with a current mid score of 641. He's motivated to do something soon because he wants to move to AZ by the end of the month but he needs to be able to get $80,000 out of the house to go to AZ with. He owes $216,000 on the property. He's willing to take a 2nd mtg. or lease option. I can finance this with a 2nd mtg. but the interest rate would be 8.87% from the bank. I thought either a lease option or wrap around would work best.
Is there a way to structure this deal to be advantageous for me or should I cut bait and move on? I appreciate your attention to my question.
Thank you
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