Need Help On A Lease Option

I currently own a home that I am renting out. I would like to do a lease option with the current occupants. The current house is a 2 bedroom 1 bath. I will be upgrading the house to a 2 bedroom 2 baths with a new kitchen, new bathroom, new flooring, new paint, new appliances and roof. I feel this is necessary since the house is all original since 1982. This is what I have come up with:



Current mortgage $59,000

Second mortgage $37,000

Rehab Estimate $24,000

Total Investment $120,000 $720



Current appraisal $138,000



After market value $180,000



3 Year Option

Monthly payment $1415

Option $6,500 (500 for application fee and security deposit)

Credit for down payment $200 a month or $7,200

Total price $202,475 (4 % appreciation)

Down payment $13,200

Price after term $189,275



Profit

Price $202,475

Investment $120,000

$82,475



$1415-200-720= $495 X 36=

$17, 820



Total Profit $100,295 (Give or take a thousand)



Please let me know if this sounds right or if I am missing something. I would appreciate the input.



Thanks



[ Edited by hubmers on Date 01/01/2008 ]

Comments(0)

Add Comment

Login To Comment