Lease Options & Underwater property

[Jose Enage]

I need inputs of our "lease option specialists" in BP for a deal I am putting forward.
My understanding is you can do this even if the property is underwater. Please advice if it is viable.

There is a balance of $120k on the mortgage. It is a 2/2.5 bath townhouse. Monthly payments are at $900 (mortgage, PITI, insurance, HOA, tax). Rental comps are $675-985. It was vacated last month and rental was at $900. Property recent sale comps are at $50K (last 6 months). Seller is very motivated as he was denied a remodification of the loan by his bank as it is his second home. He is an out of state owner. Short sale is not an option for him as his primary motive is to protect his credit - which he needs for other purposes. He is very open to the idea of lease option.

Is this viable for a sandwich lease or is it better to wholesale this L/O? Any ideas on how to set this up if at all viable?

[Brian Gibbons]

Thanks Curt Smith , Jose Enage let's look at it this way, what PERCENTAGE is it underwater, not HOW MUCH?

I look for deals on a LO Assignment that are no more than 10% underwater.

If it is worth $50K, that is $55K.

Your example is over 100% underwater, more than $50K more than the comps.

How is that ever a good deal for an end buyer or yourself?

If I found a free and clear house say comps are $50K, and Sellers wanted $55K, I would do that if they carried a note with 1 payment down and 180 payments / 15 year note.

This REI business is my price / your terms or my terms / your price. Don't get a bad deal just to get a deal.

Brian