Here is an email I received after speaking with the homeowner over the phone today. He is relocating due to work and does not want to work with an agent.
"Only two options would work for me:
A) 100% cash at the time of closing-within few weeks up to 60 days max - provided some active conversations going on.
B) I will continue to be the landlord - getting market rent - will pay for services whichever applicable for managing property, collecting rent, etc. Along with the pending intent to sell 24 months from now (lease option)"
I was originally looking at this as a wholesale/lease option...
My questions: Can he still be a middle person in any way acting as the landlord for the property if we move forward with a lease option?
Should this be a wholesale deal instead? He does want a profit...
Here's the numbers:
Repairs: $10k (according to owner its cosmetic and external freshen up..sounds a bit much)
Mortgage: $42k (approx.)
His pocket $: $20 - $50k ($30k would be more ideal..his words)
Assign fee: $10k
Thank you in advance!!!
Smells like a wholesale deal to me IF all the numbers are head on.
I would try to wholesale it, but that would be based off a property repair quote and some good comps. $42+30+10+10=92k Sold: 122-92=30k
Sounds very promising, but its all based off of the correct numbers
Thank you @Chaz Reid !
I agree with you.. I will get a contractor out this week to take a look at the property.
I definitely think I am overthinking this 'simple' process, however how does the seller receives his profit? Is his profit included in the sale price?
Yes, his profit is in the sale price.
$42K (Mortage) + 30k (Sellers Profit) = 72K (Price you need to get the seller to agree to)
You now market the property for 82k (The 10K difference is your assignment fee)
The buyer/investor you assign the contract too, then puts in another 10K in repairs, so he's all in for 92K, for a property with an ARV of 122K.
Thank you @Matthew Bond :)! You are awesome! Exactly what I needed.
No problem, and good luck!
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