All Forum Posts by: Trudy Tucker

I don't know what the terms are he offered, or what you were planning on selling it for, or your market, so to say it's a bad or good deal is hard to say. All I'm saying is it's not a scam. Often it's a good offer to someone who's renting a house that they really can't keep up with and would possibly like to sell in the long run. usually there's a clause in there that the renter is responsible for repairs up to $300 to $700 before the landlord is responsible for it. When a tenant feels that he's going to have to fork out his own money he's going to take better care of it. Also a tenant who feels he made might be buying the house in the long run is going to take better care of it. If you sold it as a rent to own the terms would be totally different than someone that is trying to rent it from you in a rent to own contract. Larry Mckinstry was the one who taught me this. 

@Lesley Resnick This is not a scan. I haven't used this method but a mentor taught me about it. Like mentioned before this is a good way for a person with bad credit to be able to purchase a house. Let's use me as an example I offer to buy your property on a lease option to buy. I get a tenant in there and he pays a deposit towards the deposit of purchasing the house in the future which will be in the terms of the option, let's say three to five years. If the tenant chooses not to purchase the house I keep the deposit and can get a new tenant in the house. You have a long-term tenant in the house now who is responsible for maintenance up to a certain dollar amount that you have set in the contract. This tenant pays rent above the normal rent and the extra money is going towards his down payment on purchasing the house in the future, set in the contract. Once the terms are up, the tenant can purchase the house at the set price agreed to in the contract. Typically if you are going to use this method you would take your current sale price and increase it by certain percentage each year and come up with a new dollar amount assuming that the property would increase in value and be worth more. This is an excellent way for a person to take control of a house they do not own and be able to rent it or sell it to someone else. The person taking control of the property would also typically file a right to record notice of interest with the county. The person who is trying to do the lease option to buy from you is also creating cash flow without ever having owned the property themselves. Another way to look at it is it is a contract to take control of the property without them having to put a down payment and closing costs to purchase it themselves. They are going to get someone else who is going to purchase it in the future but in the meantime there will be a tenant and the property will cash flow, they get a deposit that is non refundable if the tenant does not purchase, and they didn't have to but they house themselves.

Patrick that will be my next step-finding the funding to build. That's a new process for me. I'll have to educate myself on that one.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $254,456

Two houses on .26 acre lot in a popular area of St. Petersburg. A 1934 Craftsman cottage(2/1 with a den) and a smaller 550 sq ft house(1/1 with bonus room) . Currently renovating and bringing up to code. Will be renting in the next couple of months. This is my first investment purchase. Cash flow expected to be about $800/month. Will be managing ourselves to start. Property zoned <10 units. Bigger plan to build-thinking 2 cottage duplexes.

What made you interested in investing in this type of deal?

Houses less than 1000 sq ft are selling for $200,000+. I could see that this property had a lot of potential since it was zoned for up to 10 units already. These craftsman houses are hard to come by and I could see the value in that as a rental with the potential to expand the property value by added more units.

How did you find this deal and how did you negotiate it?

It was an interesting situation. I originally found it on mls listing, but the owner then said it was going to auction on xome.com, I put in 3 offers of which he declined. Two of the offers had to go through the auction site but were still before the auction. Since they were declined the site gave me the ability to offer those same bids on the day of the auction. I actually thought I was done but I won the auction at my last offer. I then negotiated a credit of $10,000 at closing.

How did you finance this deal?

Conventional loan

How did you add value to the deal?

Currently bringing it up to code. Failed 4 point inspection on everything. I replaced the back half of the roof, added 3 closets(one is for the washer and dryer), matched the fixtures, repainted the house and currently rewiring the house. It is 85 years old and the wiring and electric service is not enough for the house. Smaller house has not been started yet.

What was the outcome?

House will rent for $1600/month. Mortgage is $1527. Smaller house will rent for $800-900/month.

Lessons learned? Challenges?

Things take so much longer than you expect.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent Stacy Bennett. Looking for a lender with less fees.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $254,456

Two houses on .26 acre lot in a popular area of St. Petersburg. A 1934 Craftsman cottage(2/1 with a den) and a smaller 550 sq ft house(1/1 with bonus room) . Currently renovating and bringing up to code. Will be renting in the next couple of months. This is my first investment purchase. Cash flow expected to be about $800/month. Will be managing ourselves to start. Property zoned <10 units. Bigger plan to build-thinking 2 cottage duplexes. Later possibly a garage behind the larger house with a apartment above to possible make an airbnb.

What made you interested in investing in this type of deal?

Houses less than 1000 sq ft are selling for $200,000+. I could see that this property had a lot of potential since it was zoned for up to 10 units already. These craftsman houses are hard to come by and I could see the value in that as a rental with the potential to expand the property value by added more units.

How did you find this deal and how did you negotiate it?

It was an interesting situation. I originally found it on mls listing, but the owner then said it was going to auction on xome.com, I put in 3 offers of which he declined. Two of the offers had to go through the auction site but were still before the auction. Since they were declined the site gave me the ability to offer those same bids on the day of the auction. I actually thought I was done but I won the auction at my last offer. I then negotiated a credit of $10,000 at closing.

How did you finance this deal?

Conventional loan

How did you add value to the deal?

Currently bringing it up to code. Failed 4 point inspection on everything. I replaced the back half of the roof, added 3 closets(one is for the washer and dryer), matched the fixtures, repainted the house and currently rewiring the house. It is 85 years old and the wiring and electric service is not enough for the house. Smaller house has not been started yet.

What was the outcome?

House will rent for $1600/month. Mortgage is $1527. Smaller house will rent for $800-900/month.

Lessons learned? Challenges?

Things take so much longer than you expect.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent Stacy Bennett. Looking for a lender with less fees.