Hello everyone! I am gearing up to propose my FIRST offer as an investor and I don't want to sound like the newbie that I am. I have my eyes on a FSBO property down the street that I would like to make an offer on before the end of the month. I want to use a Lease Option but I'm not entirely sure what questions I need to ask the owner as part of my due diligence. This is where I am in need of your collective knowledge and experience. Thank you in advance.
@Robert Morales So you want to make an offer on a FSBO. Do you plan on taking over the payments of the FSBO and assume their loan? Or are you wanting to Lease the property with the Option to buy it at a later date?
Or are you wanting to offer this as a Lease Option to a prospective new owner/tenant?
@Jack Bobeck , I found out that there is no mortgage on the property, it is being rehabbed but it looks like they want to stop putting money into it. Ideally I'd like to lease option to a new prospective owner/tenant. Seeing that I wouldn't be able to put a tenant in until after the rehab is done, I need to find a different strategy. Any suggestions?
@Robert Morales I love the lease option idea! It allows people who could not qualify for home through conventional methods, an opportunity again at home ownership. So the "owner" owns it free and clear, but needs work. Perfect for the "Work for Equity" program. I would set a fair price below the sales of homes in the area and offer an "owner" equity if they fix the items. This is a win-win for you and the tenant/owner.
@Jack Bobeck So if the area supports $160K, offer something like $100K for the property if the work is completed?
@Robert Morales Do you have an estimate of how much more it needs? You could offer $X for as-is/where-is, then turn around find your Lease Option candidate and have them finish it for a better price.
If they stopped putting money into it, they may be ready to dump it.
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