To 'subject to' or to not 'subject to'
Okay BP-ers, looking for some advice/opinions regarding a property I own in Charlotte, NC,. Like most other owners who purchased a new construction property in 2006 I am even/slightly upside down still. It was originally purchased as owner occupied, converted to rental in 2009 when I moved to Florida where I still live. Details of the current situation:
30 year mortgage (PITI): $864/month, HOA: $80/quarter
Previously rented: $1000/month, self managed from 600 miles away. With repairs I basically break even each year if lucky. Have gone 2 for 4 with good tenants, 2 tenants stayed 2+ years and left on good terms, 2 have been evicted. Vacant now after most recent eviction.
Owe around $120k on it, likely worth $110-115k due to other foreclosures in the neighborhood.
The property has been a big headache, hard to self-manage because I have not had good "boots on the ground" to do all the things needed to get the property cleaned and rented out again. I have no desire to sell and come to closing with $10-20k so selling outright is not an option. Looking into other alternatives than just renting again and hoping for the best, I am sick of this house and don't care whether I make money or not. Handing it back to the bank is not an option, I have an 800+ credit score and have no desire to change that. I have been presented with different offers:
- lease option. $864/month (covers my PITI) , buyer covers HOA fees and repairs, $4k upfront for 5 year option to purchase at whatever my current mortgage balance is at the time.
- lease option: $5k down, $1000/month, 3 year term. Same option structure, purchase price is whatever I owe. Only difference is $5k is held in escrow and only paid IF they exercise the option. In other words, could also be seen as $1000/month for free option to pay me $5k more than I owe if they want to buy.
- re-rent it out. I have found someone who is willing to help find a new tenant, likely in the $1000/month range again. Will not be ongoing PM but will be willing to assist with anything needed in the future.
- Attempt to find end user who has a desire to do rent to own option. Would be looking for similar structure, someone to put down some money to rent for $1000/month and get credit towards closing if purchased or option to buy at a certain price.
I guess I am hesitant to take a lease option because I always want to be the one BUYING via lease option, not selling. On the other hand I don't care about making any money on this house, I just want it to be the least amount of headache as possible. I have enough going on here in FL that this house just ends up being a pain in the butt more than anything. I would honestly love it if someone exercised their option to buy it, I don't want to have to carry that debt on my personal debts any longer.
What would you BP-ers do?