Need help with a "Subject To" deal
I've been contacted by an individual who is wanting to sell his home for pay-off.
The basics:
Assessed at $89,900
Retail value $99,000-$105,000
4 bedroom, 3 bath ranch
Can purchase for $52,000 by assuming payments of $752 a month including PITI
The house will lease from $800-$850
2014 Taxes were $841
Estimated annual insurance $750
Waiting to hear from owner how many years are left on the note
If I am figuring correctly, there would be $204 a month positive cash flow along with a $5000 non-refundable option fee? Is that a fair option?
I have never done this type of deal and am wanting to make sure I have it right. If I understand correctly, I will make the payments under the subject to agreement. I do a lease with option to buy with a lessee with a non-refundable lease option fee. The lessee is responsible for the lease payment plus taxes and insurance. I think this is the general idea behind it.
What am I missing?
How is the deed conveyed if the property is paid off?
Is this a good deal in your opinion?
I've purchased many properties but am trying to broaden the range of my deals. I've never purchased in this manner. Any ideas or suggestions are appreciated.
Thanks, Mike