Newbie Working On Sub2 And Second
Hi Everyone,
I am working on a sub2 with a motivated seller needing to do something with their existing home because of buying another. Here are the particulars:
ARV 167,000
1st 120,000
2nd 36,000 (OWC)
Selling Price 156,000
payments 840.00
Market rents approx. $1100 month
I am proposing to cover the sellers current payments taking the existing sub2. Having the seller carry back the balance as a 2nd. Paying off the 1st and 2nd within 3 years. Selling to a buyer on a lease option two year contract for $175,000. Asking 5% option down, 1200.00 month with difference applied towards principle. I don't know if I missed anything here.
Does this deal look like a good one?
I would also like to know what forms I would need?
Thank you for any and all input I much appreciate!
Brenda
You say ARV- How much repair does it need? Do you mean FMV>>>
The nembers look good if you can get 175K.
You want $1200/mo rent. But what do you mean with the difference going to principle? The difference of $1200 and what? $840, $1100. I believe you're talking about "rent credit", but please clarify.
Sam
Hi Sam,
Thank you for your reply. The ARM is that it is not FMV. The homeowner will be doing all the touch up work which is not much. The home is in good shape. The difference on rent is the difference between the $1100.00 and 1200.00 in other words applying the $100.00 towards the option or as you rent credit I guess is what it is called. I am still learning the lingo. I feel this would be a good deal if the seller is willing, we will see. I am also wondering exactly what forms to use for a sub2? Do I go through a normal closing? Again thank you for your time and input it helps to talk with others that have already done this.
Thanks,
Brenda
Brenda,
So what happened with this deal?
John
Hi John,
Well the deal did not work out. The seller wanted to cash out not carry or do a sub2. The husband I think was ok with it but the wife I believe is the one that would not go for it. We called him back and asked him if he was interested and that is when he said he would pass as he was supposed to get an offer that afternoon. The house was priced below market so I expected it to sell but wanted to try anyway. Thank you for asking. I am working on an other though so on ward and up ward.
Brenda
Brenda,
Thanks for the update.
As he was 'suppose to get an offer' you might want to check back with him just in case it did not work out. His wife's motivation might change if they find that owning two is no fun.
John
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