Lease Optioning A Rehab. I'm Fixing
Im contiplating some creative financing with a motivated seller. He is open. The house needs about 20k in work which I'll do myself. Would I make agreement for forcasted RMV when rehab is done and shoot for a High % of rent going toward purchase. I'll be living in a dive for a while.
Or may be make rent based on an increasing value scale.
I want to sweeten this so he feels adaquately compensated yet don't want to be paying much to live there initially.
Ideally I'd like every penny of my materials and sweat to go toward payment on the house but how would that be built into an arrangement?
thanks for any ideas
itemize what work you are going to complete, and assign a value to it. So by the first of Novemeber (for example) you will have completed $300 worth of work ($100 painting, $100 toilet repair, and $100 lgith fixture replacement)
Just make a schedule of what work you will have done by when. Include pictures and reciepts with your monthly statement.
In transactions of this type I like to prevent future bloodshed. I always remember the one I fixed up and when I had finished the owner took me to lunch and laid it on me. The house was so perfect that he decided to continue living in it and how soon could I get my tools out of the garage? He was very nice offered to cover the costs of my materials. My reward was living in a slum for three months of really hard work.
Suggestion:Offer him a fair price for the property as it is NOW. Add onto that price the rent you will pay him during the projected time of fixup. It should be very low cause the living conditions are primative. Record the agreement to purchase or lease option depending on what law school you went to. Shake his hand, hand him the traditional $10 and go to work. He got rid of a dog, and you have the chance to create an item of true beauty which will enhance your status in the community and attract all kinds of beautiful people to your housewarming.
Include me in. Cheers Lucius