OfflineOk I have found some buyers and my main buyer has 25k to put down as an option and can afford $1300-1400 per month she would like a 4 bedroom. I also have an investor I have partnered with that can pay cash. So my thought was and please give me any advice and encouragement as possible back to my deal my thought was I would send her with my agent to look at houses which would be foreclosures, have her pick at least 5 out she likes. Then I would have my partner buy it for around $100k then sell it to her as a lease option for $160k with $25k option payment and $1300 month for 3yrs with a $100 rent credit.
Purchase at $100k
Sell for $160k
OP-$25k
Rent-$1300 mnth
Total profit $60k/2= $30k each
Buyer/Tenant
Buy for $160,000
OP $25,000
RC $3,600 100 mnth 100x12x3= $3,600
Purchase $131,400
Does anyone have suggestions on how to do this differently or is this the best way? Any and all advice greatly apprecitated. Have a great day.
Kevin
That sounds like a very workable deal. How will you and the investor split up the $25,000 up front fee and the monthly payments? There isn't a right or wrong way, but it is something you and the investor need to have worked out.
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We are going to split the OP down the middle and as far as the $1300 I haven't worked that out yet. I don't know if I would get $200 a month as a rent credit and he gets $1000 just so he feels a little safer and I have cash flow coming in for myself. I could use the money in the middle and he doesn't need it. So it would look like this:
ME
Upfront (OP)-$12,500
In the middle (RC)-$200x12x3yrs=$7200
Exit- $10300
Total $12,500+7200+10300=$30,000 Profit
INVESTOR:
Upfront (OP)-$12,500
In the middle-$1000x12x3=$36,000 of his $100k investment
Investment to be recovered $100k-$36k=$64,000
Exit- $81,500-$64000=$17,500
Total $12,500+$17500= $30,000 Profit
What would you suggest?
Kevin
Looks like a workable deal on both sides for you as long as your investor is ok with you taking the middle money. Pretty creative move. Are there any other props out there besides a foreclosure that you might be able to pick up at a cheaper price? How are you going to compensate the agent to drive your buyer around and look at houses? Just my thoughts though...Jan