[Ken Collins]

Ken Collins

Hello Folks, I am new to CashFlowDepot. I have been marketing for Wholesale deals in Wisconsin and I have purchased one great deal, but I have come across many many more deals that I just could not pay what the seller was asking and make the numbers work. I had heard about buying “subject to” and I found a deal that worked for me using this model but the seller decided to run it by their lawyer and it was a non-starter.

I was talking to a fellow Real Estate Investor about this one and he suggested that a Lease with Option is something that lawyers are more familiar with and may be more likely to approve and he pointed me to this awesome website. So here I am 3 days and 30 hours of listening to the options training later and I think I have an OK grasp on the concept.

Here are the deal specifics:
The seller owes 149K and needs 15K for a down payment on a mobile home so they need $164. The house is valued at 185K and has been meticulously cared for with new windows, siding, roof, furnace, water heater, and flooring. they want to move near family quick due to medical issues and don’t want to mess with a real estate agent. The monthly payment with tax & insurance is $1022/mo. I have run an ad on craigslist for the home without giving the address for $1400 per month and in one week have 20+ interested tenants. I am fairly confident I could find a lease with Option to buy tenant willing to agree to 185K option or more and pay $1300 per month lease. So I could get cash flow and future profit on the sale. The current owner will not want any involvement in the management of this deal or tenants etc. so I will take all of that on 100%.

Here are my questions:
1) Does this sound like a winning deal?
2) what is the simplest way to structure this?

Thanks for your opinions in advance and please ask me any questions.
Ken Collins

[Jackie Lange]

Jackie Lange

Hi Ken

Sorry for the delay in responding to your post.

Sorry, but this is not a good deal to buy.

The only thing you could possible do with this is get an OPTION them to marketing to sell it with seller financing that wraps the underlying loan. A highest bidder sale would work great!

It is extremely doubtful that you would find a lease option buyer who would put up $15,000 down on a house they don’t even own.

To get big down payments, you need to sell with seller financing.

are you sure about the property value?
How long have they owned the house?
Is there mortgage fixed rate with no balloon?
any repairs needed?

Remember, do not do skinny deals. They are too dangerous. The safe thing to do is get an option then do marketing to find a buyer. Selling with seller financing is the fastest way to solve the seller’s problem and get your paid too.