Is there a market for turnkey rent to own investments?

[Doug Pretorius]

I've never flipped a cash flow deal to another investor because it has always seemed to me to be an unnecessary extra step. But I'm wondering if it might be an option when dealing with sellers who are less motivated than I need them to be for my typical deals.

Just to throw out some numbers, I'm thinking the average deal would be something like this:

PURCHASE

$500,000 | Value
$450,000 | Purchase Price
$90,000 | Down Payment
$360,000 | Balance owing
3.19% | 5-year Fixed
$1,739 | Payment
$9,000-$11,000 | Closing costs

SALE

$550,000 | Sale Price
$16,500 | Buyer's down payment
$533,500 | Balance owing
5.19% | 5-year Fixed
$3,161 | Payment (taxes extra)

PROFIT

$16,500 | Buyer's down payment
$164,762 | Difference between mortgage balances at the end of 5 years
$85,320 | Total cash flow
-$11,000 | Closing costs
-$27,500 | Assignment fee
$228,082 | Total profit over 5 years

50% annualized COC; 10% annualized ROI

Apologies if any of my numbers are off, I wrote this up quickly before heading out.