Looking for a Strategy on this Property
While jogging yesterday, I came upon a property in an absolutely prime coastal location in San Diego that was vacant, with a "for rent" sign out front. Of course I stopped to check it out. The outside of the property looks dilapidated, but it is newly updated inside, and new deck in back yard. It is off the beaten path on a dead-end street, where there is no traffic driving by to see it.
One of the neighbors saw me looking around and we got to talking. Turns out the owners, a married couple, just died (not sure if at the same time) and passed it along their 19-year-old son in a trust. It is locked up in the trust, and he can't sell it until he is 23. I am thinking of maybe trying to set up an option-to-buy in 4 years, or a lease-option with a 4-year term, but obviously there are some legal and ethical considerations.
My questions for the members of BP:
1. Legal considerations: This guy doesn't have the right to sell yet, but does he have legal basis to enter into an option contract or lease-option contract? Any other strategies I haven't thought of? It is probably out of my league price-wise for an outright purchase anyway. I am thinking of maybe offering to purchase an option-to-buy contract with a 4-year term (would that even be legally binding if he doesn't legally own the property yet?), or a sandwich lease-option, with a 4-year term?
2. Ethical considerations: The owner is obviously going through a difficult time in his life. I don't want to take advantage of him, or even create anything close to that perception, and I want to be sensitive to the fact that he just suffered a major loss in his life. His parents didn't want him to sell for 4 years - is it slimey to try to find a legal loophole that would ultimately result in him selling? I'm thinking buying an option from him or setting up a lease-option could be win-win, since (1) he is being forced into being a landlord, and probably doesn't want to deal with being a new landlord on top of dealing with his parents' recent death, (2) he could probably use some cash now to deal with expenses of rehab costs, funeral costs, inheritance taxes, etc., (3) higher monthly cash flow for him from a lease-option, (4) he would have the peace of mind knowing either he will get an offer on the place when it's time to sell, or if not, at least I will have increased the value of the home.
Sorry for the long post, but very interested to see what you all think!