1st Lease option deal

3 Replies

Hey guys, I have a potential deal that I found on craigslist, here are the terms:

Sales price $115k, 

mortgage/taxes/insurance $1,200

property valued at $125k

Rent $1,500

I'm going to ask for a $10K down payment from the tenant-buyer 

Seller gets security deposit of $2,400 and option money of $2,000

My profit from the deal: 

300 per month

$5,600 difference between down payment and security deposit/option money

and then $10k once the property is sold.

Tell me what you think, once again this is my first deal, so keep that in mind. Also feel free to give me constructive criticism, please I welcome it! Thanks guys in advance. 

@Qasiym Glover  

The important thing is you discuss with the seller all their options.

1. Selling with an agent, paying the costs to sell, netting 85% to 90% of appraisal.

2. Renting with a property manager or FRBO, dealing with an unproven tenant

3. Do a terms deal, such as lease option assignment, wrap sale, etc. and make or net more money.

She doesn't want to sell with an agent, she much rather go the FSBO route. So I presented her with the lease option and she is excited about the going that way. She doesn't live in the property, currently she's renting it out, so she wants to get rid of the property. @Brian Gibbons  

I used your LOI @Brian Gibbons, question is it necessary to give the "landlord" a security deposit and Option money? Giving the seller the option money did help me get the property for 115K as oppose to the asking price of 120K which will give me more money when I sell the property. Your thoughts?

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