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wholesale lease option???????????

December 7th, 2012 | posted by 84pickup

I received a call from a guy looking to sell his house.
The details- house is worth about 160k
mortgage is 150k
payments are 1372/month-4 months behind
could be rented for 1500/month
he is open to a lease option.
There is not enough cash flow to stay in the middle of this as a sandwich lease. Also, the option fee would have to be large enough to bring the mortgage to date and leave a profit for me-say at least 5k, so an option fee of more than 10k would be needed. Is there another angle that i am missing or should I just pass on this? Any thoughts DG family?

On 8:38am, December 7th, 2012 kareng said:

Rick

kareng's picture

Not only is he going to be behind in his pmts, there are also going to be charges and fees attached to this.

Have you cked to see if his rate is fixed or adjustable? Has he gotten his default notices? How long does your state give before the foreclosure? Has he gotten his auction date?

You say "about 160k." Have you cked comps to get an accurate number?

The problem with trying to L/O a prop in this situation--what if you get someone in there, take their $$ and pay the back pmts, fees, etc and spend your part and they get a letter to vacate because the sale "accidently" happened because the bank made a mistake and the timing was too close? It has been known to happen.

Those T/Bs are going to want their $$ back and in this situation the "nonrefundable" would not apply. You would have to give it back!!!

Just speaking for me, I would not take the chance. I'd pass.

Karen

On 15:26pm, December 9th, 2012 84pickup said:

Wholesale lease option??

Karen,
Thanks for your reply. I had also contacted a fellow investor from my REIA that usually does shortsales to see what he thought because this seemed a bit too complicated. I didn't know that he was doing L/Os also and he was very interested in partnering on this. It would not have been 50/50, he would bring the mortgage current. He wanted to do a 5 year term. I was certainly willing to share on this because I was almost ready to pass on it and this would give me a chance to learn from a seasoned investor. We have set up 2, 3 way calls so far, but the seller has not been available. I will contact the seller one more time and explain nicely that we are there to help him, not sell him anything and to call me when he feels ready. After all, he called me. By the way, the lead came off a magnetic sign on the tailgate of my pickup. I will let you know if this goes further. Thanks again, Rick