All Forum Posts by: Nick L.

I'd defer to some of the more expert people on BP, so I am posing my suggestion as more of a question.

Would it be possible to do a lease-option with an option price in the neighborhood of 125k-135k (depending on term)? In the short term, this would allow you to get partial or full relief from the monthly payments. It would also allow the potential buyer to build up her credit by making you monthly rent payments (I am not sure the steps you'd need to take to help her get "credit" for making on time payments - check with an attorney and/or a mortgage professional).

The longer the term of the lease-option agreement, the more of your principal is theoretically paid down. If she decided never to exercise her option, you would at least have some principal paydown, and you may be able to find someone else to come in to the house using a similar agreement.

The downside you have to look at it and decide if you would be OK with: are you prepared and able to bring money to the table to cover the difference if she does exercise her option?

I am a little late in sending out a "hello" to BP. I've been active on BP for about a month. It is so motivating and full of so much knowledge. Looking forward to getting to know each of you better and to all of us doing lots of deals and having fun in the process.

Currently working on my first 2 deals and hoping to complete 5 before end of 2011. :D

@Rusty - I know the feeling. I started REI beginning of this year and have definitely had to work with my girlfriend (we live together) to strike the proper balance. In the end it is all about communication - if you are able to communicate your goals and make HER part of them, you will find success in your relationship. If it is only about you and she is just a footnote, it won't work because that isn't fair to her.

@Justin - when you made the leap and quit your job, how did you know it was the right time?

Bryan and Scott - thanks for your advice!

The seller's motivation is not the amount of payment, but rather the distance to the house. Because of this, I am thinking she would be ok with a little higher payment on the 2nd if it would be paid off more quickly. I may work with her on that to create a note where she pays me $150-200/month to pay off the 2nd and then continue paying her loan. I'll need to secure against her car or maybe her new house, although she may be renting right now. Need to determine the collateral to be used.

Thanks again. Anyone have any more insight or experience in this type of transaction?

Hi. I am working with a seller on a subject-to deal. Here is the info:

Owes 47k on first (payments = 387/mo PITI)
Owes 7k on second (payments = 90/mo PITI)

The seller has agreed to continue making the payments on the second mortgage.

How do you suggest I write up the agreement with this seller? Should all of the above terms and conditions be solely written in the purchase and sales agreement? Or should there be an additional contract/addendum regarding the seller paying back the 2nd mortgage?

The exit strategy is to assign this contract to a landlord who wants the property as a rental. I want the end buyer (landlord) to be comfortable with the agreement.

Thanks

@JD - what type of marketing led you to this deal? Sounds like a killer deal depending on how much the tax lien is for, and more importantly, who is going to pay it. :)

Hi Ed,

I think trial and error is a great way to get started. Like Ned Carey said, not every strategy will work in every market.

Make sure to keep track of your marketing efforts. If you put an ad in Craigslist and no response, try re-phrasing the ad, or try posting the same ad on a different day of the week (I've heard Saturday mornings are best). Then the key is to track which ads perform for you, and find out why.

Good luck!

Not sure if I answered your question... I was "talking out loud" doing some deal analysis in my head.

You definitely need to see the rent rolls (you said "Currently is fully occupied with long term leases in place (2+ years as I'm told)" which led me to believe you haven't seen the rolls yet).

Full disclosure - I have not done a deal like this so I'd wait for some ppl more experienced in commercial deals to weigh in. Just putting my 2 cents out there.

Greg - what is your strategy for this property? Hold for the cash flow?

Are the rents in line with the market rates? If not, you might be able to bump up the rents and quickly increase the property value if your goal was to re-sell it for some cash.

If there are a lot of long term leases in place, this is good if you want to buy and hold (as long as there is good payment history on these leases). It could be bad if you want to flip for a profit because your ability to increase rents is not there.

If you are putting 70k down and bringing in about 25-30k/yr then you're looking at a 2+ year payback.

Good luck with it!

Here is a company I ran across that does provide the letter: http://www.************************/

Is it wrong to use the letter to keep the deal alive and then find the funds before closing?