Primary Residence Sub 2??

I am currently renting an apt in a duplex which is my primary residence and the owners are looking to sell. From talking to them their motivation seems to not want to landlord anymore. I had mentioned that I may be interested in buying.

Asking price/ 249,000
Comps/ One just sold down the street for 299,000
Monthly income/ My apt is renting for 700 and the other one can rent between 1000-1200.

I want to approach them with an offer but was trying to decide how to structure the deal. Is is Ok to do a sub 2 or maybe just a lease option? The area is appreciating a lot and is a very nice neigbohood.

Has anyone done this before? Any advice will be greatly appreciated.

Comments(2)

  • samedwin15th March, 2004

    Althought the property value is very high, the rents may not be suffiucient enough to cover a mortgage. Do you have the cash to put into it each month to make the monthly payments?
    If you take it sub-2, you would not have to worry about coming up with the 20% down that many banks require on an investment property.
    I personally prefer sub-2 to L/O because YOU get the deed. See if they will be willing to let you take over their payments and take the deed. You will then be resonsible for all maintenece/problems, taxes, P&I, insurance and they will be out of it completely. If you do a L/O, they will still be resonsible for taxes, insurance, large maintenence items (furnaces, water heaters maybe, A/C, roof, etc) give them BOTH options. don't just give them 1 option. They may forget they have a3rd option, not to sell to you. LOL
    Good luck.
    Sam

  • horeheym15th March, 2004

    Third option is very true..lol. Thanks for the advice.

    What about equity in the house? Do I negotiate a price now and purchase a year later? Just trying to see what would be an incentive for the owners to sell that way.

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