Indianapolis Lease-Option Deal

[Terone Johnson]

Hi Everyone,

My partner and I have a deal in Greensburg, IN just outside of Metro Indianapolis that we don’t have enough equity to wholesale the property like we usually do but the owner has told us that he would entertain a 2 year lease option on the property. We like the area and feel like a lease option would be a great exit strategy here and the Ideal situation would be to sandwich lease option the deal to an end buyer that would want to buy and live in the property. I have looked into this exit strategy in the past but still have yet to do a lease option deal.

One big issue standing in my way is he has a mortgage on the property and I have not really seen the process of a lease option being done with a house that has an existing mortgage. Would he need to get permission from his mortgage company to lease option this home? All he wants is to get from underneath this mortgage payment which he is willing to sale the House for the 65k and we just pay his current mortgage payment. For those of you that deal with lease options regularly, we’d appreciate your help and opinion on how to position this deal or the right steps we need to take. Details are below.

-Purchase Price: 65K

-ARV: $79,500

-Current mortgage payment: $648.00

-Market Rents: $750/mo

-No Rehab needed for rent ready

-2 year term for $648.00/mo no down payment.

Thanks ahead of time! 

Terone Johnson