Rent-to-own On A Rehab
I own outright a rehab. Though about flipping to investor/rehabber for a quick profit.
But, I am considering a rent-to-own on it to a handyman/contractor tenant. Currently not habitable. But with a little work would be. Would be a good deal for tenant and me. I can make a lot more money in the deal.
3 year rent to own, $4,900 option money - $495 rent ($100 credit) Option price $49,000 ($40,500 with credits). Worth $70,000 after fix up.
Would you do it?
Any downside?
THX
Only if all of the repairs are completed before the tenant moves in.
Tompa,
How much work is there to do for the tenant? What guarantees do you have that the tenant will do the repairs correctly? Do I read it correctly that you are giving the tenant around 20 grand for his part in all this in 3 years? Have you ever heard of equity sharing as a way to balance the funds and still get the work done? Protects both parties in that case.
Stellar,
Thanks for your reply.
Correct. Repairs approx. $12,000 - $15,000. In 3 years fixed home should be worth +-$75,000
How would an equity sharing work in a L/O situation?
THX