OfflineI purchased a bank owned property a year ago for $36.5K and put about $10k into it. I rented the property for a year to college students and last month inked a 3 year lease with the option to buy at $100k with a single family. They are paying $1500 a month in rent with $300 going towards down payment every month. My expenses on the property is under $600.00 including mortgage, taxes and insurance. Over the next 3 years I will profit over $20k in rental income and net over $60k at closing. Not a bad return on my investment. What are your thoughts and or advice.
PS. I also have a $25K line of credit on this property that I have not touched.
Spec on the House
House Appraised at: $90k
5B/2FB
2700 Sq Ft
8000 Sq Ft Lot
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Great numbers on the house. How much option money did they put up?
This sounds like a really good deal. The numbers are really good on the rental aspect as well. Nice job
Reynold Orozco
Congrats Marcellus that is awesome......
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Hey Rich, did you have special paperwork drawn up by a lawyer since the new Dodd/Frank bill doesn't like these types of transactions? Would love to see it if you are ok with sending me a copy? I know there are ways to do this and ways to get around it, just interested in how since I want to do some LO.
SEMPER FI
GET SOME!
Once you have a LO contract on a house, you are not supposed to legally be able to put any additional liens on the house (such as taking $$ out of your HELOC)
Karen
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Karen, why do you say you are not supposed to legally be able to place a lien on a lease optioned property?
Im going with the Dodd/Frank on this one hummmm.
Im not sure why you are paying 600 a month for 36k?
Im hoping you got 5k + from them on move in?
Im sorry im lost on this one, it makes no sense...
Be careful on L/O
Aaron
The option is $10.8k but it was not paid up front. I choose to go with the premium option with the tenant paying $300 over the rent ($1200) each month. The $300 goes into a non interest baring account that I have control over. Tenant really wanted the house but did not have the upfront money for the option.
Hey Semper Fi
I used the website DYI LANDLORD to draw up the agreement ($20). I then had it reviewed by my lawyer to make sure it was in both parties best interest. I then had it notarized. I am not familiar with the Dodd/frank bill but I will look into it to make sure I don't place myself or buyer in violation of any real estate law and regulations.
Marcellus
Real Estate Rich
Karen
Hey Karen...
Thank you for the info. I was not aware that once the property was under contract the seller could not use the HELOC. I will be sure to discuss this with my banker although I had no intention on using it unless I absolutely had to.
Marcellus
Real Estate Rich