[Kyle Corbin]

Kyle Corbin

Here’s the situation:

Tired lawyer lady landlord wants to get rid of her 6 houses. Two of them have paying tenants, one is 2 or 3 months behind, and one is not paying because she has not fixed the heater.

She is asking $30,000 per house, or $180,000. She is willing to owner finance. I’ve decided that to get decent cash flow from the properties that I can afford to pay $1200/month if they were all rented.

The problem is that a lot of them are vacant or delinquent.

I offered her a performance based master lease for 12 months at rents set by her. I offered her 90% of the rents I collect during that 12 month period with an option to buy all of them at $5000 down and $1200/month for 20 years. I could flip this contract, or keep them, depending on how well the houses do.

She would be responsible for fixing the vacant ones to rent-ready status during the master lease.

She was not thrilled about that last bit in that she is afraid that she will be stuck paying $10,000 or something if she agrees to make any repairs. The “broker” who we’re going through thinks that it wouldn’t take near that much to get them ready. The owner thinks that the $30,000 per house is the “as-is” price and she shouldn’t have to fix them up at that price. Though, she doesn’t seem to understand that I’m offering more than she’s getting right now.

Any ideas on how to share the costs, get them ready, etc?

(This story is similar to Jackie’s Brainstorming, 12 houses that the landlord wanted to dump).

[Jackie Lange]

Jackie Lange

Jack Miller always said never do business with a lawyer — not buying or selling..

but if you want to take it on, this is what you can do.

What are the houses really worth all fixed up?

Instead of aiming to keep all 6 houses, try wholesaling 2-3. Let your buyer fix them up.

If $30k is a good price, then you’ll be able to make a little profit on each one.

Try to buy $25,000 for cash deals and $30,000 with seller financing.
that makes a bigger profit margin for the houses you wholesale.