Lease Option Deal Analysis Patterson Park Baltimore, MD

[Angela DeBorja]

Hi all. I'm looking for input on a possible sandwich lease option deal, or a pure lease option with transfer/sale of the contract to the tenant buyer. A good friend purchased her rehabbed row home on a quiet block of Linwood Avenue, just north of Patterson Park in Baltimore, MD for 250,000 in 2007 at the peak of the market. She owes 221,000. Her mortgage is 1686. She rents it to church missionaries for 1350 for the past 4 years. She does not have the heart to raise the rent. She has tried to sell it in years past but could not. Area rents for similar properties range from 1750- 2500 roughly. Could I potentially offer to do a lease with option to purchase from her in say 5 years, then try to find a renter or tenant buyer to rent the property for 1800? Then keep the difference between the 1686 and 1800? She is open to transferring it over for no fee or nominal option fee.  From my reading, it sounds like I would have to find out if her mortgage contract forbids lease option. It would give us practice on landlording, and she may be agreeable to the setup and future repairs as long as it covers her mortgage. Thanks in advance.