Would you do this deal?

9 Replies

Home owner want out of the mortgage current let on loan is 125k House ARV is 140 Owner willing to do an subject to if you find an buyer with in 15 days to pay next month mortgage and wants 5k to walk Payments are 900 monthly House market rent is 1100 Buyer ready to move in and put 2000k down You will have to finance 3000k

Instead of putting $2000 down and borrowing $3000, what if you sign a lease for $900 per month and an option to purchase the home for $125,000, assuming your ARV calculation is correct. This allows the seller to get out in the next two weeks and they don't have to worry about the mortgage payment. It's cheaper for you because for $900 you tie up the property and you can start looking for a retail buyer. If it takes you 3 months to find a buyer for more than $125,000, it only costs you about $1800. Find a buyer that will buy it for $135,000 and exercise your option for $125,000, unless you can get it for less.

At first glance, I would make sure my end buyer has at least $5k.  I would only grant an end buyer a lease with  option, not an owner finance.  The SAFE act and Dodd-Frank rules scare me financing the owner-occ.  I don't touch those anymore.  

I would buy sub2, then lease option to my end buyer.  Their $5k is option consideration.  The word 'down payment' would not be mentioned.  Ever.  Good luck @Rae Remer !

The way to explain value of the property

ARV is 140, loan is 125,

costs to sell are 10% of ARV 140 or 14K,

140 - 125 - 14 = 1K profit

Do a lease option assignment make 3% of 140K or $4200 and get out of that deal.

Give a $1000 to seller if you want.

@brian 

@Brian Gibbons can you break down the cost of sell. I know the listing agent may get 3 percent but what else should be considered in the cost to sell so thatt i can explain to the sellers

@Anthony Dooley when you suggests I lease if 900 or the current mortgage you're saying  offer an leasing purchase for the 900 with an option to buy at the amount left on the mortgage right? I think this might be my best bet no cash down at all ill rent it for those 3 months. what all contracts i needed that different from the ones i use for an subject to deal

You need a lease agreement form and an option to purchase form. I wouldn't pay them more than a few hundred for the option. Then find a retail buyer who can get financing and put it under contract for $140,000.  I don't recommend leasing it to anyone because you said market rent was only $1100. That's not worth it. 

Originally posted by @Rae Remer :

@brian 

@Brian Gibbons can you break down the cost of sell. I know the listing agent may get 3 percent but what else should be considered in the cost to sell so thatt i can explain to the sellers

Hi Rae,

that goes over the costs to sell.

Originally posted by @Rae Remer :

I think it was removed can you message me the link @Brian Gibbons

 If you Google 

Brian Gibbons costs to sell 

you'll find it

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