Lease Option And Then Rent
I am looking at a property for sale for $150,000. Its a 2 family that rents for $625 a side. I am thinking of offering to lease option it and then rent it out. I will offer a small amount down, but dont know what to offer for a monthly lease payment. I can calculate what I could pay and to make a monthly profit but how do I know that will cover the sellers monthly payments and expenses?
You might want to check out the training from the Lease Option King. He posts on these forums a lot. And, IMHO, his training is excellent.
why would you assume a mortgage that is upside down?
Why would you not sub2 this prop? Before you put your butt on the line.
Personally I would pass on the whole deal.
Good Luck
You could get the Deed and still use a L/O...or get even more cash-flow by selling on a LC or wrap.
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Land Contract
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All,
I am going to continue this thread in the deals in progress section. I am in the middle of two deals, one being mentioned above and the other a plain straight option deal. LOK, if you may, can you help me in this area if I post some more questions? These deals are my first experience in RE and I am nervous, but determined.
Thank you all.
Of course.
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Confusion leads to a "no." Simplicity is the key.
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In a week or less, you could have a dozen qualified Tenant/Buyers with 3 to 5 percent for consideration. Did you say $20.00 security deposit? Are you serious? You said to be brutally honest, so here goes: I predict the person you are putting in that house will not make the first payment. Sorry. I smell disaster all over this. This is the first time I have ever seen a deal where you pay the Seller consideration and receive less (or in this case--NONE) from your Buyer. This is not the way this business is supposed to work. The Tenant/Buyer should have no right to extend (at least not in writing), because they have come back years later and sued to cloud the title (and judges have agreed due to an extension clause). You should give the Tenant/Buyer just one year (in my opinion).
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"A deal is only as good as the quality of your Contracts." --Me[ Edited by LeaseOptionKing on Date 01/23/2007 ]
I would just like to see you do things safer in the future and make more money with much less risk.
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Yes, sir...
I will post sometime after 1 Feb to keep you, and the rest of the group updated.
In the mean time, I am looking to purchase a condo conventionally to lease-option out. This time, the deal will be strictly in my favor for the most part.
Thanks, LOK. I am changing a few tactics before Monday.
God bless and thanks for the responses. I can see I can look forward to good help with future deals.
- Jugg
Janet...
How dare you tell me that Carleton Sheets is out dated!!
You should have said Carleton Sheets is shrink-wrapped garbage!!
No, really...
I gotcha. I am learning a monster lesson and hope that this is over soon... straight up. The next deal is already mapped out by the numbers... you know... like kindergarten coloring books.
- jugg2000
I am looking for the same thing. Preferably an attorney that can structure the contracts to ensure my interests are protected in the beginning. Also, the attorney would need to be versed in the eviction process for the "just in case" scenario.
This is an ideal situation for a Master Lease. Get the rent amount to the Seller down as low as possible. You will make some great cash-flow during the year (save a portion of it for a down payment). When you close, close on the 5th. The Seller will have to prorate the rents and give you the rest at closing, which you can also use towards the down payment.
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How does a Master lease work and where can I find one? What incentive does the seller have to do this? Where do I work in the option to purchase this property at the end of the year?