Multiple Offer: Request for Feedback

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  • Good evening everyone,

    I would like to offer the seller of a 2b/2ba Condo Apartment in New Jersey 2 offers: Owner financing or Lease-Option. May I please request your feedback. Thank you.

    P&i – $715/mo
    HoA Fee incl. water/heat/AC/elec – $689/mo
    Special Assessment – $122/mo until 12/2022
    Property Tax – $388/mo

    Asking: $209k
    Sold Comps in the same building: 180k-190k
    Market Rent: $2000-2200
    Reason for selling: Seller wants to move to Utah immediately, for new job opportunity and better snowboarding in the winter. If apartment doesn’t sell within 3 weeks, they will rent it out. Seller open to terms or lease-option, but would eventually like to buy another personal residence in less than 5 years. I told them I can offer quick solution, but if they are looking for the most profitable transaction, then they should wait out for a conventional buyer which may take 60+ days to close. This has been the seller’s personal residence for 3 years.

    #1 Owner Financing Offer:

    $210,000 AS-IS Condition

    $15,000 Downpayment

    Entire Balance of $195,000 due to seller July 2025.

    Offer expires June 30, 2020.
    Close no later than July 31, 2020.

    #2 Lease/Option Offer:

    Option to Purchase: 215k
    Consideration: $10,000

    Rent for min. 5 years, total of $25,000, payable monthly. With options to renew initial rental term 8 times. Agreement to include right to sublease to a qualifying tenant, approval by seller, as required.

    Tenant pays:
    1st $100 repairs
    HOA Fees
    Renter’s insurance
    Property Taxes

    Lease can begin on the day, owner chooses to vacate to Utah.

    For consideration of $10,000, Tenant has the right to purchase property for $215,000, after 5 years of early/on-time rent payments, 100% of consideration, early/on-time rent payments, and any improvements to property, to be credited against purchase price, at time of sale. Seller to be notified 30 days prior to purchase.

    Your feedback is appreciated.


    Here’s a better plan with less out of pocket expense (like none) and much less risk!!

    Just lease the house with the right to sublease it. if it will rent for $2000 a month ( on a good day) you need to get YOUR rent down to about $1500 max. In this market, set it up as a performance lease which means you don’t pay them a penny until you get a good qualified tenant in the property. You might make a little less cash flow but there is much less risks.

    Find out what just the HOA fee is only (not lumping in utilities)

    The tenant can pay utilitiesl

    Give the property a test drive for a YEAR then go for the option or seller financing. If you make the payments on time and don’t call the owner with a lot of repair requests, you are the logical person for them to sell to with seller financing. If you discover the owner is not so easy to deal with or the house has hidden problems, then you can walk at the end of your lease. win win.

    You don’t need to pay more for this house than it is worth just because the seller will finance or do a lease option. What do they owe??? Is it a fixed interest rate loan with no balloon?

    Keep in mind that the economy is NOT GOOD now and will probably get worse before it gets better. The price of the home could go down a little or a lot in the next year.

    Hello Jackie, Thank you for your feedback.

    The building is not sub-metered, and the utility bill can’t be placed under an individual.
    HOA Governing Docs show that the apartment’s share of Proportionate Liability for Common Expenses is .5371%. My understanding is the HOA fee portion is $319 + Common Exp. $370 = $689/mo HOA?

    I will limit my offer to the asking price, thank you for the suggestion.

    This is a 30 yr fixed interest rate no balloon, and the remaining balance is approx. $143k.

    In that case, I would walk away from this one!

    It’s bad enough to have an HOA but when they control utilities it makes it a NO GO ZONE.

    Even if you could buy subject to the mortgage at $143,000 I would walk because of the HOA structure

    too many other REAL deals out there.

    Thank you, Jackie for your expertise!

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