"Subject To" &" Maintanence" Questions
1st of all I am planning to start investing in real estate through sandwhich lease optioning.
If I use subject to clauses and I want to get out of a deal how do I do it? For example: I plan on using one that states that the contract is "subject to me finding a qualified resident for property" within
xxxdays. Now, if I don't find a tenant in xxxdays do I just call the seller and tell them sorry no deal? Also am I responsable for any payments while searching for my resident?
I also don't want to have any landlord problems such as maintenance. An investor from another forum said he takes over all maintenance responsabilities and costs from the seller. Then he hands over all of it to his tenant/buyer.
Some books I have read say to tell the seller that you will handle all repairs under $200 in any given month (which should take care of 98% of it). Then suggests telling the t/b that they are responsable for anything under $200 in any given month since thay are the future home owners.
Is one better than the other? They seem to do the same for me(the middle man),
but which is better for all three parties?
Also, is handing over maintanence responsability even leagle? I live in Ohio.
Thanks for any help?
how about structuring the deal so that you don't close until you have a buyer/tenant?
If you've noticed in slow down in your housing market, or found it's taking longer to get your houses occupied, then be more cautious and buy better.
In fact, you can buy with no risk when you find the right type of house and motivated seller...
EXAMPLE:
"I appreciate the fact that you'll sell me your house for what's owed plus $1,000 in moving money, but with the way things have been going, I cannot commit to taking over your loan until I line up my occupant. Your house has too much owed against it.
Now, I do have a program to help home buyers get into a house when they need some time before getting a bank loan. And 60% of the general public is in that position.
This gives me a strong marketing advantage when I buy houses. I can offer to finance my buyer myself or rent the home until they close later.
Therefore, I'll agree to buy your house if you can give me some time to find a buyer. Once I do, I'll give you your $1,000 and start making the loan payments, getting that debt off your back."
When they agree, I advertise the house with "owner financing" or "no bank qualifying" or "rent-to-own." We get at least 3% to 5% down from a tenant/buyer as a non-refundable purchase deposit. This works the same as option consideration on a lease option.
If I'm selling for $179,500, then I'll get at least $5,000, plus the first month's rent. Then I can complete my deal with the seller and enjoy the difference ($4,000) immediately.
Be careful to use this only if the seller doesn't care what you sell it for or when they have already vacated the home. Sometimes I'll have the seller show the house for me!
You can also use this strategy if the seller's payments are in default, and use the buyer's money to cure the default.
The rest is in 5 ways I take money out of a deal on this site by richard roop <IMG SRC="images/forum/smilies/icon_cool.gif"> [ Edited by rajwarrior on Date 07/08/2003 ]
Just curious Stock, have you personally done this successfully?
The reason I ask is because while I believe that this would work in some circumstances, the question that keeps coming to my mind is 'why would the seller accept such a one-sided deal?' You're saying that you'll buy the house ONLY IF you find an acceptable tenant/buyer. But isn't that already what the seller is doing, trying to find a tenant/buyer.
What exactly would you be offering that the seller isn't? The seller is already open to lease/optioning the house to a qualified tenant, he's considering leasing to an investor.
Roger
Stock, either I don't understand what you are saying or you don't understand me From what I understand there is no closeing untill the tenant buyer uses his option to buy, which would be at least a year from me taking controll of a said property. In that case it would be a double close between me and the seller then me and the buyer. An other thing, I wasn't aware that when you do a lease option you take over the loan. I thought you just make payments to seller and they pay the loan. Help me understand this.