All Forum Posts by: Shannon Elam

As far as giving money towards the mortgage meaning that we are giving them an equity position,  isn't it understood in doing a lease option that the option fee is more of a deposit until they exercise their option?  So that doesn't count as owner financing and we should be able to evict instead of foreclose if need be.   

We have decided to do a lease option after not being able to sell in the market so anything less than that would not be advantageous to us.  So while I appreciate the use of other strategies we have decided to go with a lease option and want to know how to make a lease option work in everyone's favor and legally. 

@JimPiper Should 2.5X the monthly rent be net or gross? And to be clear,  the $100 per month is the amount above market rent that would be applied if and only if they exercise the option.  We were advised by a realtor to use this option fee and that it had to be above market rent in order for banks to accept it as apart of the down payment in the event that they exercise their option to buy. 

I've been playing phone tag with a lawyer but the $200 towards the mortgage is intended to be a credit towards the cost of the home when they decide to exercise the option to buy.  If the don't exercise the option the monthly option would be refundable,  but not the $5000 option fee. I'm basing my terms on stuff I've read on Bigger pockets and elsewhere.  I don't think we are giving them an equity position.  But I'll contact a lawyer.  And it's not my primary residence that I am offering.  What difference would that make? 

Forgive me. The 'y' seems to be stuck on my keyboard. lol

I have an interested lessee to do a lease with option to buy agreement. We ran a background check with a tenant screening website on both the husband and wife. The both have credit scores between 520 and 550. Their income is greater than 2.5x the rent (I'm waiting for check stubs to see if that's net or gross) and they have no evictions. 

The do have some collections on their reports that could be a bit alarming, but the wife has informed me of her efforts to repair her credit and has even offered documentation. 

The terms of our lease option are $5000 down/$1600 per month/$200 per month towards mortgage. We settled on $5000/$1550/$100. After we dragged our feet on moving forward (waiting on a buyer) they offered me $6000/$1550/$100 to show they were serious and motivated. 

Is there anything further we should do to vet this tenant? My partner and I, unfortunately, have different opinions about the tenant's history. I think they are a good candidate. He thinks not. I don't want us to make a decision based on emotion considering that we do not have experience as landlords, yet. 

What would you do?

So I ended up getting 12 x 24 tile for a fireplace at Floor and Decor ($1.22/sqft) and kitchen backsplash tile at HOBO ($8.39/sqft). Hobo had the better price/selection of backsplash tile considering they had a clearance going on. They had some plastic subway tile backsplash for as low as 2.99, and some nicer stone and glass backsplash for as low as $6.00. Floor and Decor had a better selection of large rectangular tile.

Both pieces were clearance so I made out like a bandit (I think).

@Mike H Lowes is probably the only home improvement store I haven't been to. Mainly because they dont display pricing on their website, which is very frustrating when I am price comparing for certain items.

Thanks for all of your input guys.

Thanks Igor,

I looked at their website and see much better deals than I have been finding already. I'm heading out there today. Thanks a million.

@Timothy, I will keep that in mind. I hope I get to a point where I will need to buy tile in bulk. 

Hello BP,

I am a new investor working on my first flip in the south suburbs. We are finishing up the flip and getting ready to list as we put the final touches on the property. Could any Chicago investors recommend an affordable tile supplier? 

Thanks,

Shannon

Thanks guys. Very valuable advise. 

Thanks Gregory. I agree that we should have purchased and delivered the materials, but not knowing everything needed for each job (yet), it was easier to let him pick out the stuff he would need. He did measurements and knew how much he would need. Next time I think we will just order the major stuff and give him a gift card to get the miscellaneous stuff that we couldn't anticipate. After a few jobs, I'm sure we will have a better grasp in things,

Hello BP. 

My first flip is currently in process. The contractor is okay, but I have a question. We allowed our contractor to use our store credit card to buy supplies to rehab our house. For the most part he has done that, but he also bought major tools to do the work such as a miter saw ($400) and a power painter ($320). My question is:

(1) Do we keep these tools?

(2) Let him keep the tools and take the cost off his labor?

Is it normal for a contractor to buy major tools like this on the client's dime?