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Got a nice lady who needs help referred to me by a friend.
Husband Passed away suddenly last January.
She is unable to continue their life style on one income.Home is in forbearance with bank. .
That is up in January, says that she has to make the full payment of approx 3500 in order to bring current.She is done with the home, was trying to get them to do a deed in leu.. ( they want her to do a short sale)
The payoff is approx 75k. Recent sales 80 to 115 tops in the neighborhood, as is I’d say 85k, shined up 110,000
Piti is 780 or so.. would rent in the 950 to 1095 range with some paint and cleaning..
Right now She is willing to let me lease it for the payment and have an option to purchase at the payoff. I offered to split the profits from sale when I eventually sold it if she got the for forebearance current.
She has 2 adult sons who are not interested in the home. ( should I try to get a quitclaim? I think the couple were joint tenants with rights of survivorship )
What documents shold I use? She also may be going through BK also.. not sure.
Was thinking the 2 page lease with the option ( for THE EQUITY ). In depot.
I see I have the option to pay cash to extend my lease and option.
Who does that go to? My seller plans on being scarce going forward. .. ( move/travel/ect) I will have her email.
And what document to record a mortgage to protect the option? This is in the Atlanta, GA Area. I am a licensed Broker, with Mls and have disclosed all that.
This is about 50 minute drive from home 25 from church ( we attend the same )
Any thoughts, want to make sure I do this right so she can move on and I can manage this successfully.
You need to do one of two things
1. just buy it subject to the mortgage after the seller bring the loan current. Verify that it is a fixed rate mortgage with no balloon. And make sure you verify that the loan is brought current. Definitely take title in a Land Trust as this will protect it from Bankruptcy.
2. If you do a master lease with an option, have the seller execute all the closing documents BEFORE she leaves town. You may never find her again to close the deal later. Most title companies will only hold the closing docs 1-2 years so you will need to do the final close before it expires.
Another way to handle this is to get an option then do a highest bigest bidder sale.. It would have to be for a highest down payment because there is not enough equity.
I may have overstated the disappear aspect. She has family and friends in town, so I believe she will be around, and any where she moves will be in a community we are both members of.
At this point I would rather do the master lease, just because this would be my first deal as a principal in the transaction. ( and minimal out of pocket) ( I’ve read most of the subject to wrap docs, just having a hard time wrapping my head around it ( at this moment ) and what it will cost for the closing and filing )
( I would also like to include her on the upside when it sells )
For the master lease route, the form for the lease option would be written up and notorized, followed by a deed of trust to secure the option? Or am I wrong?
Thanks Jackie!
Nitya, I may be wrong — and I know Jackie or others will correct me if I am — but I don’t believe a master lease makes you a principal in the transaction, as you stated in your second paragraph. You would need to have an accompanying option or similar document to give you a principal interest. And a ‘master lease’ and ‘lease option’ are 2 different types of transactions.
Mike, you are correct.
with a master lease, you are a leasee
with an option, you are an optioneeWhen you put the two together, you have an equitable interest in the property,
BUT you are not a principal in anything other than your name or your company name is on the contract which gives you an “Interest”
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