What's The "standard" For Option Consideration?

I'm about to make (an offer) on a L/O someone wants to assign.

The property is 35K and they are asking for 5K as option consideration. Is that appropriate?

Also - can I make an "offer" on this if I think the option is worth less?

Sorry to be such a "newbie" but I don't want to embarrass myself on my first deal.

Thanks!

Comments(3)

  • davehays10th March, 2004

    wait a minute, someone wants to assign a lease option to you?

    How does that work?

    please spill out all the details regarding how you found the deal, who is involved in the transaction, what the exit strategy is, etc.

    I think some investor is trying to take advantage of you.

    you can email too, if you want. I have never heard of assigning lease options. Lease options are involved enough. - Dave

  • lassitermarketing10th March, 2004

    I've done it before. Lease Optioin agreement satates I can assign it once without the seller's permission.

    That sounds high for a $35K prop. Does it cash flow? Is it "sandwiched" already?

  • tmpringle30110th March, 2004

    No it's a legal assignment - same as mentioned there is an assignment option once during the term without consent.

    It's a 7 yr term with 5 left - it's already "sandwiched" as there is a section 8 tenant in place. The property has a very small positive cash flow but I only expect it to break even. It appears to be priced 20K below market value, but I have not had the home inspection as of yet. (never know!!!)

    I was going to offer 2K for the option consideration - what do you think?

Add Comment

Login To Comment