Motivated Seller -- How to Structure the Offer(s)
Hi BP Nation,
I have a motivated seller with a property in Florida. He wrote a lease-option on the property 2 years ago, tenants are great, responsible for all maintenance, no late payments. Option is written for 5 years with 1-year renewable. Purchase price is $182,000. Buyer paid $9K option payment. Credit toward purchase price is $150/month. Monthly payment is $1100. Taxes/insurance are not escrowed.
He has an ARM at 3%, balance is $130K, payment is $650.
He needs to get this loan out of his name bc he wants to buy a house to live in--tough to qualify with this loan in his name.
I suspect there are several creative ways to buy this house. However, as a newbie, I am at a loss of how to begin to structure an offer or offers. Thank you BP!
Most Popular Reply
Since he has an ARM, you should be able to assume his loan, assuming you would qualify to do that. The tenant buyer would have $18,000 credit towards the purchase price after five years bringing the balance owed to $164,000, so I would not offer the seller much more than that. Or you could write a subject to type deal and offer some of the future appreciation, should that occur.
I am a little surprised that the taxes and insurance are not escrowed. How much do those amount to every month? It would nice to have positive cash flow on a monthly basis.