Evaluate this lease-option offer from seller....

[Jake Berwind]

I am wholesaler here in Jacksonville and I came across this deal on Zillow that I am looking to do a lease-option with. I sent the seller an offer, and she sent me back this reply......anyone ever have an offer like this come by. If so, let me know what you think!!

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Jake

I would write a Residential Lease with Purchase Option Agreement where you are the Tenant with ability to sub-let. The Agreement will auto renew each year until March 31, 2024 at which time payoff is due. I would include a payment agreement whereby you would pay a deposit of $1000 prior to beginning payments on April 1, 2019. Payments are based on a mortgage concept where I am the mortgage holder in first position, sales price of $45,000 against which your deposit is applied, 5% interest for an amortized term of 15 years and a 5 year balloon. This gives you a payment of $360. Per month. If you are late 21 days, the contract is terminated.

Assuming normal payments of $360.00 per month, the first year the payoff is 80% of the scheduled amount due, the second year the payoff goes up to 85%, third year 90%, fourth year 95% and 5th year 100%. For example at the 12th payment the scheduled principal payoff is $41,979, 80% of which is $35,682.15, which would be your payoff amount.

I would retain title until you pay off the loan, pay homeowners insurance thru 10/7/19, property taxes until you pay off. I will not be responsible for any repairs. 

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The property needs some repairs, but not much. Just some minor touch up stuff. I would rent it out for $760, leaving me with $400 a month that I would be cash flowing. I'd be looking to get 5-10k as a down payment from the tenant. 

Let me know what you guys think and if I should go ahead and do the deal.