Which way would you structure this deal?

[Michael Williams]

Hi BP,
I would just like your advise on this one. Putting together a contract for a house in a hot part of Atlanta. There is major construction everywhere around this house. The owner is a tired landlord and is selling off properties. This house is on a very busy street and is a huge corner lot. This house and others in that area is are averaging ARV's of between 240k -280k. This particular house is worth $245k and they want $269k because they know it is a hot area. There is a stretch of 5 houses two residents down that are mini mansions worth 700k-850k that were all built by one developer at the same time. I plan to contact that developer to see if he is interested in this plot as well. The problem is that the owner with the house between them isn't interested in selling which could have made it sweet for that developer.

This is what I plan to offer. There is a $155k loan on the house, so my strategy is to offer $50K cash and a "subject to" arrangment for the loan. The rent in this area is a strong $1,500 per month. House was rented one month ago for $1,500. Need about $5k sprouce up (Paint and some landscaping). Loan on house is $700 per month, so cashflow would be $800 per month. Let tenant pay loan down for 3 years then lease option with an exit in for $290k. New owner would have a strong possiblity of being bought out by same developer when other neighbor decides to sell in the future. As an investor, would you take this deal if I presented to you? If not what would make it sweeter?