[Paul Julian]

Paul Julian

Hello Jackie. I think I know the answer to this and I have looked at the Texas property code as well to confirm it, but sometimes I miss stuff.

Texas lease options, which are considered executory contracts, do not apply if the “buyer” is an investor, correct? So as an investor, I can “buy” using lease options at will.

Thanks.

[Jackie Lange]

Jackie Lange

Yes, you can BUY using a lease option all day long… as an investor.

But you cannot sell with a lease option in Texas

[Paul Julian]

Paul Julian

Thanks for confirming Jackie. I have a 3/1 leased in Mabank with an option to buy within a year at the mortgage payoff plus 2k to the sellers. The underlying note is at 12%, 30 years.

My first option is to get him to come down to 6% and let me take over payments. He wants the income. Second option is to find a joint adventurer, a la Dennis Koelsch, and have them put up the money to own it 50/50 with me doing the work. Third is to go to the bank and get a new loan at around 6% on a 15 year payoff.

Any ideas or suggestions are appreciated. Thanks.

[Jackie Lange]

Jackie Lange

what is the mortgage balance? what is the property worth?

the underlying note is WAY too high. I’m surprised it would cash flow.
Is it a private note?

3rd option is getting the tenant approved for enough financing to cash it out. Then getting an option for future upside potential.

[Paul Julian]

Paul Julian

The mortgage balance is $49,500. It is worth around 58k. It is a private note. It will barely cash flow with that note. It will need to be paid off or renegotiated. With a co venturer or getting a 15 note in the 6% range it will cash flow around $150-175 per month.

[DON WEDE]

DON WEDE

Paul,
Why not use an idea you already mentioned. If an investor to pay off the existing note. Try to get a discount. If the note holder gets tough, no discount no pay off. Strike a deal with your investor whatever works for the two of you.

Don Wede

[Jackie Lange]

Jackie Lange

I would not get in to this deal unless and until the note is either modified or paid off at a deep discount.

It is a loan shark loan