OfflineOk, well I may have a deal in the works here, but I don't know if it is really a deal, or something I will be sorry for later.
Recipe:
1 lease/option buyer
1 investor/seller
1 Me in the middle
1 house whose estimated value on TotalView is $104,337 which has no mortgage
Combine a seller who wants $30,000 down ( I may be able to talk him into $25,000) with a lease/option buyer who actually is looking into getting $30,000 to put down.
Now, the seller won't talk monthly payments until I come up with something that involves the $30,000 down.
I was thinking I could offer him a 3 year lease/option with $25,000 down and $700/month ($200/month going to pay down the balance) I would then use the $30,000 from the lease/option buyer to pay his $25,000 and keep $5000 for myself up front. I was then looking at charging the lease/option buyer $950/month in rent with $200 going to pay down the balance.
The way I figure it, I would have the $5000 up front + $250 / month.
I think that sounds decent, but I don't know how to justify the monthly payment amount to the seller. How do you come up with how much you want to pay the seller each month when he doesn't have a mortgage payment for you to work in?
Also, he is saying he wants $125,000 for the house using a method like this or a land contract. He only has the house listed for $115,000. So, how does that make sense? And, how do I make any money off of that in the end? I figured I would have to get him down to $120,000 and then charge the lease/option buyer $125,000 in order to break even in the end when the option comes due. Is it OK, to break even in the end if I am making money in the front and in the middle?
Or, honestly should I just have this woman work it out herself with the seller. She found the house and gave me his number. She had wanted to buy it from him, but couldn't get approved for the mortgage.
Any advice?
Thanks so much!!!
Susan
Susan
Don't take no for an answer!
Don't live in the gap!
Don't give up!
You can follow my progress at: http://www.deangraziosi.com/real-estate-forums/investing-journals/54148/...
Everything thing on the house has been completely redone. It is truly turn key, down to the roof and everything else.
Susan
Don't take no for an answer!
Don't live in the gap!
Don't give up!
You can follow my progress at: http://www.deangraziosi.com/real-estate-forums/investing-journals/54148/...
Go with the tought that he won't accept less. Craft your plan around that.
If you're not going to make money from it then leave. If you're not going to make as much as you'd prefer, stick with it; something is better than nothing and to get a check so early in your REI career is a great accomplishment. Plus, you can keep your husband quiet and he'll believe you now.
I'm assuming that the $10k he wants is to make sure he's not wasting his time; he's probably used to people lowballing him or not following through, so prove him wrong but before you speak with him have your plans in order.
Hope this helps
Well, the buyer is willing to pay $30,000 down. I can't believe it but she says she is. She want to do a land contract, not a lease option and the seller is preferring a land contract.
So, how do I approach the subject of getting a fee for working this deal for them. I never thought to try to tell anyone about a fee initially because I was going to do a sandwich lease option. Ugh! What are my options?
Oh, and she wants to have 30 - 45 days to come up with the down payment.... do you think that will fly?
Thanks so much to anyone who can provide insight.
Happy investing!
Susan
Susan
Don't take no for an answer!
Don't live in the gap!
Don't give up!
You can follow my progress at: http://www.deangraziosi.com/real-estate-forums/investing-journals/54148/...
In Ca. you have to have at least 5 years on your lease options so check your state. Also, My question would be about taxes. Does it look like you are profiting $9,500. a month? And what is the going rental rate for what you are offering? Thats where to start. What can your buyer afford? It sounds like you are explaining a sub lease. Thats when some one rents to one party and then the renter turns around and rents it out for more. My leases spell it out, "No Sub Leasing!" Landlords can frown on that so you need to be up front. All I know is make sure you have it tied up before any info is shared. And just tell her, since you are doing a land deal now instead of a sandwich deal, you will need a fee for you services. Its always best to be up front then know one gets angry. If she balks, then no deal. I hope this helped.
Charisse
I think that is exactly what I needed to hear. That is a great way to word it to tell her that since I am not putting together a lease option but rather a land contract deal that I charge a fee for my services.
I was hoping to do a lease option but.... things change and you have to roll with it I guess
Thanks again!
Susan
Susan
Don't take no for an answer!
Don't live in the gap!
Don't give up!
You can follow my progress at: http://www.deangraziosi.com/real-estate-forums/investing-journals/54148/...