Creative financing ideas?

Question

I just purchased my first duplex wiping out my cash reserves when a deal was brought to me. A friend of a friend is moving away for work and needs to get rid of their house. They don’t need down payment money and are only looking to sell for the amount they owe on the property (50k). I know a traditional loan is out of the question for me as is an FHA. I’m also new to real estate so I don’t know anyone I could partner with and no one in my family has any money to invest. I was thinking of maybe doing a lease option. Where I rent the property from the owner for the price of the mortgage then find someone else to rent the property to for a slight profit, until I can buy the property in a couple of years. However I’m a newbie and unfamiliar with financing this way. Is this even possible or is there a better way? Any advice is greatly appreciated.

Joe Villeneuve · Answer

You are new.  You're description of a lease option is only partially correct...and a very small part.  You're kind of describing a version of a OL called a Sandwich LO...but you're missing a lot of parts to it.

Joe Villeneuve · Answer

Lookup Lease Options in a search on this site

Joe Villeneuve · Answer

Search for:

Lease OptionsSandwich Lease OptionsWendy Patton

Nathan Gesner · Answer

A couple options:

1. Master lease. You lease the property from him and get the right to rent it to others at a higher price and keep the profit. Example: you pay him $500 a month, even if it's vacant. You find a renter for $750 a month and get to keep the extra $250.

2. Subject to: you buy the property from him but the mortgage remains in his name and he has full responsibility for it. Research "subject to" in the forums and you'll find plenty of info.

3. Realize that you can't afford every deal that comes your way.

Dennis M. · Answer

@Zackary Martin

Read about it on sandwich lease options search

Zackary Martin · Answer

@Nathan G. Will do thank you!

John Corey · Answer

Fill in the gaps and give the person something to research. Keywords to google, a book to read or something that gets them started towards learning what you say they are missing.

Zackary Martin · Answer

@Joe Villeneuve what would you suggest I do?

Creative financing ideas?

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