Multi-family Lease Option
I am getting ready to extend an offer on a multi-family property in the form of a master lease option. I would like to see if anyone has any advice on what to or not to put in this offer. The property income is currently about 37000/year. The asking price is 390,000. Unfortunately realtors are involved. The property needs about 20000 to get it up to par. Market rents should allow about 46000/year in rents.
My thoughts are to offer an 8 year lease, I will pay the 19000 in realtor fees now, and subtract it from the option strike price, which will then become 170,000. I will offer the seller 24000 per year which is 2000 more than they are getting now, after the prop mgr gets done with them. I am not sure how to handle the 20000 the property needs to get it up to speed, any suggestions? I am probably leaving something out, however, any advice would be greatly appreciated.
Thanks,
Arch
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