OfflineI have a homeowner that called my ad a few weeks ago about a property that is worth 153,000.00. She owes 152k on the house and wants to sell it for about 180k.
I told the owner that I wouldn't be able to buy her house for cash because I purchase properties at a discount. So I told her the best option would be a lease option. So She agreed to do 8,000 down and 1400 a month with the end purchase price of 180k
Here is my question I want to sub lease the home for %6-7% down 1500 a month and with the end purchase price of 200,000.00. Now I was having a discussion with my realtor about how much the house is worth and how much she was trying to sell it for.
She mentioned that a lot of buyers are educated and they will do comparisons and so forth. Based on the comparison's they may be turned off by the price. She also mentioned something about the bank possibly denying the loan if the price is too high.
So my question is will the deal fail completely if I list the house for more then what its worth right now? I'm confused because I could have sworn I saw Greg Murphy list properties under a lease option for a bit more then what its worth.
Im no LO expert by any stretch, but a couple of things jumped out at me. Where did the owner come up with the $180k price, the $8000 DP, as well as the $1400/month rent? And how did you arrive at your $200k price? What is the length of the lease? Sounds out of line to me as it will be highly unlikely for homes to appreciate $27k to $47k in such a short time. And the house appraising for these amounts is unlikely as well.
Fred, I would first get some good comps. It will be impossible to estimate the value two or three years out, but find out if the nabor is increasing or decreasing in value (the rate would be good to know as a starting point). I would check and get some solid Fair Market Rent for the nabor. You must set this up based on your research. Get FMV and offer owner less. Get FMR and offer owner less. Set option fee at about 3% instead of an arbitrary $8000, and you keep at lease 2/3 of that as your fee.
With all of these iffy numbers floating arounf, I think I might consider a lease op flip, get my fee and get out of town. If you have not done a sandwich LO before, I believe Id look at this one very carefully.
Fred you will get some experts on here a little later and they will probably have other very good do's and dont's. Best of luck to you.
Steve
We seldom get what we want, but we will always get what we expect.