Recently spoke with a For Sale By Owner who has a multi family 3 unit listed. He mentioned being open to creative financing, but he owes 200k on his mortgage. House worth $360k, for sale at $400k.
Total monthly rent brings in $3400.
I've made a few offers to him, but the fact that he owes $200k is looking me. I don't have the liquid funds to put a down payment, so he's now saying he'd take a rent to own offer.
We haven't discussed exact numbers. Still need to decide on purchase price or monthly rent. No option fee at all. I'd pay the yearly property taxes of $3500. A portion of the rent ($500 per month) and the yearly taxes would go towards a down payment when the RTO term ends. We're thinking 3 years.
Is it abnormal to obtain an investment this way? RTO contract, rent all 3 units out and maintain the property for 3 years, then purchase it? I scoured the site but haven't found any insight into this scenario. It's a tough search.
Thanks in advance.
i could be missing something but if he needs the cash right now and u dont have the 200k, have him sell the house at 200k to pay off the debt and he gets a month check for 3 years (or whatever time frame). if he can seller finance the whole thing, then id just do straight rent to own.
He doesn't need the cash. Would be willing to do owner financing, but I don't know of a lender that will pay off his 200k loan without me putting 0 down.
So I'm left with the option on doing a rent-to-own with him as the seller, me as the tenant, and then me renting out all 3 units.