Best way to structure potential buy and hold deal

[Shane Newell]

Hi all. I've recently come across a non-listed property in one of my target areas that fits my criteria. Property rents for $2,600 without a single vacancy over past 12 years (owner showed me leases at least). Ask price is $185k and owner plans to list on MLS in June if he doesn't sell on his own. Owner currently owns ~$100k on his mortgage, so I think seller financing would be out. Thinking of pitching lease option or subject to with second lien held by seller as well (not sure if this makes any sense).

Wondering what the community might recommend pitching.

Thanks!

[Steve Vaughan]

Good numbers for a buy and hold in my area.  Rent of $2600 on a sales price of $185k would cash-flow nicely here. So it's a house with a 12-yr tenant?  Probably in need of paint and floor coverings.

A lease with option isn't a bad strategy to get in cheaply. Make sure you can cash them out and exercise. A wrap (sub 2 with note for equity) has DOS risks and is probably at a higher rate than you could get with a new mortgage, but I've done them on the both sides pre-DF and Safe Act.

Might offer one price with a LO, one with seller-financing, a third with getting a mortgage yourself.  Price falling with each option.  I do mine this way in a Letter of Intent @Shane Newell.