Newbie Needs Feedback On A Deal I Found
I found a beautiful house appraised at $355,000 in a market that appreciates at abt. 3 - 5% annually. I have no money for investing, but owner will give me a lease option which I could sublease. He would give it for 1 year at the above price and for more years adding the inflation amt. to cost. He pays $2400/mo on his 15 yr. mortgage and has been renting it easily for $2000/ mo, thus taking a monthly loss.
He says he would let me lease it for $5000. lease option and all rental payments would count towards the purchase at the end of the lease.
What is your evaluation of this offer. I would love any suggestions, as I am a total newbie and insecure.
Joylady 
[ Edited by Joylady on Date 01/12/2004 ]
I think it sounds like a terrible deal. You are paying 5k a month and he is putting $2600 in his pocket each month. If you are 100% SURE you can make the payments, and excercise the option at the end of the term then maybe. And only if he is applying the ENTIRE payment to the purchase http://www.price.If you have ANY question at all about making the payments, I would NOT do it.
(BTW 5k/month would cover the mortgage on a 650k property easily)
If this was my property, I would require 10k down for the option and payments of 3500/month.
Btw do you think you will have 20% down to purchase the property at the end of the year, making the payments included?
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Hope this Helps!
Bill[ Edited by telemon on Date 01/12/2004 ]
Hi Joylady,
So, let me get this straight. This guy is willing to do a lease option, but wants a payment of $5000/month?? Unless market rent is that high, the deal is not doable. Now, do you want to lease it yourself? Or do you want to do a sandwich lease option where you sub lease it to someone else?
In my opinion, the deal seems a little rich. Try to stick to neighborhoods where there are a lot of buyers. Say you take the house, and you want to sub lease it, what happens if you can't find a tenant/buyer? Can you afford the $5000/month payment?
Hope this helps,
Joe
Quote:
On 2004-01-12 14:04, Joylady wrote:
I found a beautiful house appraised at $355,000 in a market that appreciates at abt. 3 - 5% annually. I have no money for investing, but owner will give me a lease option which I could sublease. He would give it for 1 year at the above price and for more years adding the inflation amt. to cost. He pays $2400/mo on his 15 yr. mortgage and has been renting it easily for $2000/ mo, thus taking a monthly loss.
He says he would let me lease it for $5000. lease option and all rental payments would count towards the purchase at the end of the lease.
What is your evaluation of this offer. I would love any suggestions, as I am a total newbie and insecure.
Joylady <IMG SRC="images/forum/smilies/icon_rolleyes.gif">
<font size=-1>[ Edited by Joylady on Date 01/12/2004 ]</font>
$5000 a month. And he is getting negative cashflow right now.
RUN, Dont walk away from this one.[ Edited by fauche65 on Date 01/12/2004 ]
Sounds like you are saying $5000 for the option price???
I would still walk away on a monthly rental price like that.
If you were going to actually purchase the home for yourself, then maybe adjust the terms to your liking, otherwise, take a hike on this one.
Lease Options are out there. Look harder, ask landlords/owners, explain the program.....