Subject To & Owner Finance to Lease Option

[Gabrielle E.]

I have an opportunity to buy a property using a creative purchase strategy and I'd like some feedback on the deal structure. If anyone knows the Virginia market, this property is located in Petersburg, VA in case that influences your feedback.

I have negotiated subject to and owner financing to purchase the deal using the following structure:

• I will pay $8k in cash
• I will take over the existing $59k mortgage payments (28 years left) of $506.70/mo PITI payments
• The owner will wrap the remaining $8k into a second 15 year mortgage of principal only payments of $44.44/mo
• Total monthly payment $550/mo
• The Deed of Trust will transfer to me at closing

I will sell the property via Owner Financing to a tenant buyer using the following structure:

• Purchase price $85k
• Pay $10k down
• I will finance the remaining $75k for 10 years at 10% interest
• Monthly payments of $1000/mo
• Buyer may cash out anytime after the first 5 years
• Tenant buyer covers repair costs
• Deed of Trust transfers when tenant buyer cashes property out

Basically this strategy is a way to get all my money invested out of the property and avoid typical rental property expenses to keep all of the cashflow.