I have a question about a potential RTO/Lease option deal that I could possibly pursue. An agent that I work with called me and asked if I or anyone I knew was interested in doing a lease option on a property for a family member of her's that is in the process of repairing their credit. This family member is looking for a property in the $120k price range, has $30k to put down, and wants $600-$700 a month payments. She is saying that she needs about 2-3 years to get her credit in shape so that she can refinance into a conventional loan down the road.
I have a SFR that I am getting ready to purchase for $90,000 that needs about $5000 in repairs to be rent ready. I was going to use a 30yr conventional loan with 25% down to buy this property and use as a rental, estimated rents in the area for similar homes are around $950/month, the ARV for this house if you did a full remodel are in the $130-135K range.
I have never seriously entertained doing a RTO/Lease option in the past and really do not know very much about how everything works. Based on these numbers is it something that any of you more experienced investors would look into?