Should I Do A Lease Option??
My partner and I just aquired a property in Los Angeles worth 680k for 640k. Currently there is a tenant in there that pays $2800. The tenant does not want to sign a new lease with us because the previous owner said he would sell it to them in August. But instead sold the house from under them. This is the reason why they paid such a high rent. I guess they thought they were in a lease option with previous owner with no paperwork. Anyway, we didn't know this. We want to sell the prop. to them but they do not have strong credit and can't buy until August for some reason. Our mortgage on this property is 3300 not including tax & ins.
How can I do this deal with this current tenant who wants this property so bad? What would you do?
Get them to give you a credit report. (MY www.FICO.COM) $12.95 per co. Get them to do a tri-merge pull just like Mtg. Co. would. Carefully go over and decide if it would be safe for you to do alease option. On avg. in La. you must come with 5% dwn and then rent, Purchasing the property at the end of lease. If they default well you keep there option money and move on from there. It is pretty safe for the owner (you)!! The best would be to be able to get better than what your mortgage is but if they are serious about buying then it would be beneficial to you to do a little L/O until they are ready!! 8-)
Thanks for your reply Mike. How would you structure this deal if it were yours. based on my mortgage of $3300/mo. how much would you have them put down, and what would the option price be? Sorry, I've never done a deal like this before.
I have a "B" broker which I fall back on that can finance anyone even without a social security number! If your buyer has 10% down of the money being borrowed, he's in. I know that's a lot considering the price, but dang, it is a $680,000 home! Dude should have a measly $68,000 to spare somewhere if he's living in a house like that!