First Deal Help!

[Stephen Hare]

Hello,

This is my first time posting on these forums. Also my first piece of Real Estate i'm considering investing in. I would just like some feedback about what you seasoned veterans would suggest in this situation. I'm kinda unsure how to finish it off. So here's the rough details:

My friend has a house that needs work. It's been on the market for a while and he has had no buyers. He had been renting it out but hasn't had a tenant in quite a while so he's sinking a lot money into the house right now just to keep it alive.

He has offered to sell me the house on a Rent to Own basis. He will "finance" me as a bank would with 8% interest on a 20 yr. fixed. I've worked it out so I don't have to give him any money down as well. He really just wants someone in it who can cover his mortgage, taxes, etc. FMV of house is 94k as of yesterday on Zillow. It's in a nice neighborhood with other fairly nice houses around it, but it's kind of an eyesore. I figure fixing it up alone will add greatly to it's value. He wants to sell to me @ 63k, taking 20 years to pay it off, with an option to purchase early if I found an interested buyer sometime down the road. My plan was to move my family into the house for a couple years, let it appreciate then start looking for buyers.

Here's where it get's tricky. He is already on a lease option with the original seller. Logically it seems I could pay my seller off what I owe him left on house, he would pay his seller off what he still owes and the original seller will turn over the house to him and he in turns turns it over to me.

My question is this. Although it seems logically possible is it legal to rent out a place to own when you're under a lease option. I suppose I would have to see the Lease he signed and make sure it doesn't stipulate that somewhere...

Any thoughts or suggestions would be GREATLY appreciated. I've posted on other forums and got no responses. I noticed that almost every topic on these forums has at least 1 response, maybe I can get one here ^^

Thanks in Advance
You're Newbie Investor
Stephen Hare
Dyersburg, TN
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