L/O From Owner, But House Already Has Tenants
Seller called me and he is very flexible and open to a lease option or "anything else creative". However, he has tenants in the house that just signed a two year lease.
Any suggestions how I can work this deal?
Thanks
Brenda
Brenda,
I recently had a similar situation. I asked the seller to ask the tenants would they be interested in a l/o instead of a lease. They said yes, so I suggested he write a l/o with me, and I turned around and did a l/o with the tenants. They are paying a 2k option deposit to me over and above the rent over a 4 month period. It can be done , but make sure you have the owner help you get everything taken care www.of.It makes the transition much easier.
Prosperous investing,
td
Great advice.
And, if the current Tenants say no (providing you have a long-term L/O with the Owner) you may choose to receive rental income for two years and then L/O it to a T/B OR just buy it yourself if you can qualify conventional. After two years of keeping your word, your Seller may also then be open to a sub2 or land contract with you.
I remember listening to someone speak who once said "I like to warn people when I'm about to say something profound."
Quote: After two years of keeping your word, your Seller may also then be open to a sub2 or land contract with you.
That's an interesting thought, that I haven't had myself or seen mentioned in the brief time I've been on the board here, or in my previous REI research. I'm going to have to think about that a little bit.
Teling the Seller you'll do something and actually doing it are two different things. After a few months of proving your reliability, the Seller can warm up to you and feel very friendly. Obvious, this Seller is motivated, but why? You will need to explore further. You don't want to be in the same kind of a bind yourself that the Seller is in (unless you have a solution). Chances are, the Seller's motivation stems from his life, but it could be something related to either the property, the Tenant, or both.
The seller had the house listed, did not sell, and then moved from the area.
The seller is getting $1300 rent from the tenants now. So if he signs a L/O with me, do I get any of the monthly money, or am I just looking for a good price and a good back end. I assume that if I sign a L/O he will want me to manage and to maintain the property. I need to get some monthly money for doing that.
Brenda
Find out what the owners bottom line is monthly...how much his mortgage is and how much could he live with just picking up a check each month without having to be a landlord....Somewhere in the middle will be your profit .....(I always shoot for at least 200/mo cashflow). See what he says.
Prosperous investing,
td
I like a total of $300 a month, but you can juggle it with rental credit from the Seller. You are taking all the risks, so the Seller has to expect to receive less.