All Forum Posts by: Maya A.

My business partner and I are considering buying a property that sits on a 20k sq ft piece of land. The house is 1600 sq ft and poorly designed but the owner updated as best he could so it is livable. He closed off one of the rooms and turned it into an efficiency that he’s renting in the back to a friend (couldn’t see it) and also turned the shed into a guest house without permits so he had to take it down and now its basically a tiny room with a bath. He is advertising it as a 4/2.5 but one of the bedrooms is a closet size that cannot be considered a bedroom. So main house is practically a 2/2 that we would live in for now.

He wants 650K for it.

The dream is to build 2 villas on one side, move into the villas, take down the house and build 2 more villas and eventually turn them into STRs.

My concern is I don’t want to buy the property and find out we cannot do this. How should we go about this?

@Greg Scott

Is this 75K downpayment paid when contract is signed or at Lease term end date?

Wendy Patton, Sandwich Lease Options

I was introduced to the concept through a video on YouTube by Kris Khron and it looked very inciting so I wanted to read on it. It's the only book I found on the subject. 

Would love to hear from anyone that has experience doing LOs or knows other resources teaching about this RE niche. 

Thank you All for your responses! 

Greg

Thank you so much for your contribution in helping me understand this! Indeed, reading this I did not think at all this would be a common scenario. 

Also, how did they estimate the equity from principal paydown as being $200/month? Is there a way to calculate this?

Hello BP community!

Reading a book on Lease Options now and got stuck on this one example. Please help me understand what it means. 

Facts: Seller has a home worth $235,000 and will sell it to you for $225,000 on an 18-month option. 

"The seller owes $150,000 on their mortgage and agrees to take $75,000, less closing costs at the time of closing ($225,000 sales price less $150,000 current mortgage balance). This allows you to get the mortgage equity during the option period. The equity from the principal pay down during this option period is estimated at about $200 per month so $3,600 total during the 18 month term." - this is word for word. 

What do you guys understand from this paragraph?