Help Lease Option Deal ASAP!
Could use some help with a deal..... may be my first! I have a motivated seller here in NJ with 3 BDRM 1 BATH house. The original deal on her home fell through and she needs about $50K CASH to close on her new house at the end of October. Fair Market Value of the house is about $220,000 (was appraised 2 years ago for $210,000). She will take $210 on a lease option... maybe even $200-205. Her monthly payment (PTI) is $1725. Was going to try to borrow $50K privately and pay 8-10% interest (interest monthly with a balloon payment at the end of 3 years when renter buys).... this is all contingent on what I can get for rent and if the numbers work out. ??? Anyone know where I can get the $50K CASH and what happens if 3 years down the road the renter decides not to buy or the market falls out the bottom? Do I tell the investor who is giving me the $50K that he/she will get their money in 3-4 years?
Do you already have a rentor for this property?
Are you allowing yourself time in contract to get a rentor before you have to start lease payments?
$200K, the bottom number you mentioned, is still 90% of FMV.
What are similar home renting for? Will you be able to get positive cash flow?What did she pay for home, and how long ago? Tax records should tell you. I think you may be able to go lower on the price.
Good Luck!
This is really strange. I am just about in the same position. I am looking at a property located 5 blocks from our downtown area. There are two universities located within walking distance from the location and average rent is $695 for a two bedroom w/basement. When the seller proposed lease option, I cringed. I am scared I will put a lot of money into this property and the seller wont sell.[ Edited by dantecreighton on Date 09/18/2003 ]