Please advise on this lease option structure

1 Reply

Hi BP,

I found 2 properties that next to each other that are currently listed by a real estate agent who is the owner of these 2 properties. They are next to each other. I will call them 1512 & 1712. They are turn key properties. 

The 1512 is listed for 269k with hard wood floor, 8 beds 2 baths with the current rent is 3200. I want to put this one under conventional loan. After account for 30% of rent including vacancy (10%), capex & minor repair (15%), property management (5%). My cash flow is 871. 

The 1712 is listed for 239k with carpet floor, 8 beds 2 baths with current rent is 2640. Like the 1512, the Cash flow on this property is 600. The seller told me that he has a blank mortgage on this one that he pays 1600/month. I am very curious about this number.

Does anyone have idea how to structure this deal? I am thinking to offer him the 1512 for 220k. For the 1712, I can offer him to 10000 for the option fee and it will put toward the closing cost after 2 years. I will pay his mortgage monthly plus 200 on top. So I am offering him about 1800/month in 2 years plus 10k up-front. After 2 years, I will put a conventional loan on this property.

Any help and advice would be thankful,

appreciate your help!