MY First L/O, Any Advice?
I am looking at a deal...Owner owns duplex outright. Has several properties and wants to sell (she's older and recently widowed). Wants tax-appraised value, which is 122,000. Comps are $125-135,000. I plan to kick out one tenant and live in top floor if the deal works. I plan to offer her 118,000, and provide her with the profit that she is currently receiving from the property (income minus all expenses). I'm doing a three-year option, with option to renew option.
My questions are:
1) she wants upfront cash for repairs on other props. How do I get this amount as low as possible?
2) should I assume all taxes, insurance, and maintenance in exchange for receipt of all rents? (the profit indicated above is equivalent to the lower tenant's rent)
3) If I give her cash upfront for the repairs, can this be the sole consideration for the l/o?
So far this seems good to me...I will be saving the $700/month I pay in rent and have an option to get into a decent house at today's price. The owner is very willing to work with me. Any suggestions/advice?
Thanks!
[addsig]
Leases stay with the property, not with the owner. You can not kick anybody out.
Is it a true duplex, or just a single family home converted? Are there seperate water and power meters?
Everything is negotiable. You should try to take as little out of your pocket and put as much in your pocket.
How much upfront money does she want? Anything more than 3% for a L/O is too much.
Do a title search and make sure that she owns it and find out who has liens on the property. File a memorandium of agreement with the clerk of the court to protect your interest in the property.
Have you thought about just buying it and having her hold the note?
I do think that she should expect to sell income property and still make the same amount of money.
Brenda
I haven't asked her how much she needs yet. I haven't considered purchasing the property with seller financing b/c my cash flow is problem at the time, and I plan to make the option assignable. I really don't want to own the house, I am looking for a place to live for a while with a return in the end. Would you still recomend owner financing instead of the l/o?
The duplex is a converted house, but there are seperate utilities, furnaces, etc. I want to get the upstairs tenant out b/c he is a liability to the property. This tenant moved in when his ex-wife moved out, no formal leases. Can't I get him out?