This is my first post on the forum, although I’ve followed BP online for awhile. I’ve learned a lot from the blog posts, podcasts, and forum and appreciate the synergistic nature of BP.
I’ve owned three investment properties in the last five years, two of which were mobile homes. The first was a mobile home which I rented for a year after which I sold for a profit. The second mobile home I also intended to rent for a year and then sell but a prospective tenant made me an offer I couldn’t refuse and I sold it. The last one is a stick-built SFR which I bought as a REO. It’s in the nicer section of my town. I paid $47k for it and will probably have around $59k in it after the new roof. I had about $3.5k worth of plumbing done as well. I intend to rent it for a year after which I will sell it hopefully to the tenant buyer. I signed a lease option with a couple back in February and they are starting to update the house already. My question is this:
When we signed the lease agreement, the upstairs shower needed some new faucet parts. Who ever winterized the house didn’t do their job well enough and done things froze. The upstairs bath was not able to be used but I told them it would be ready a week after signing the lease. The house is big, 2300 sq ft, 4 bedrooms, a huge rec/living room, another full bath downstairs which was in working condition. Needless to say, it’s April and I just got the upstairs bathroom ready to go, besides the shower surround. I ended up allowing them to spread out the option fee over three months. I collected first months rent($925)and 1/3 of the option fee($1080). The second month into it (March) they still hadn’t moved in, the reason being that they preferred to bathe their two youngest children. (Downstairs bath had a shower.) I ended up waiving Marchs rent in exchange for the tenant fixing the shower surround and any drywall patching that was needed from the plumbers repairs. They probably won’t move in till the middle of April. Since I’m a newbie to the lease option strategy, I would like some feedback. Was I too stingy with my offer? Should I just collect the option fee and not charge rent until they officially move in? I don’t want to be a slumlord but don’t want to get ripped off either. Im sellIng the house for $81k If everythIng works out. My realtor thought I could have gotten $80-84k If I would have put the new roof on and flIpped It.
P.s. Sorry about how long this post became.. 😵