My tenant wants to buy my SFR - how to structure

[Neil Rafol]

Bought a home as a primary residence in Texas in 2017. In 2018, we relocated for work. Thought we would want to come back and settle down in this Texas home. We have now decided on another route (will not return to Texas).

Our tenant is great and she has asked on more than a few occasions if we would consider selling it to her.

We want to

1) pursue this and avoid realtor fees

2) use a 1031 exchange for a multifamily property with higher returns - we have 90k in equity; mortgage= 200k

Are there any creative arrangements or factors we should consider when proposing a deal to our tenant? Thank you!

[Will Fraser]

Hi @Neil Rafol!  This sounds like a cool route.  I would show her the math for the follow:

- $x is the market value (real market value, not inflated)

- $4% - we'd pay a cheap real estate agent 4%

$x-4% +your closing costs  is what we'll sell it to you for.  You'll get the best deal that can be had on this!

Then when it comes time for the contract, I would make it "as-is" subject to a punch-list they make before signing the contract.  That way they feel taken care of, you're protected in the long haul, and everyone get's a deal!