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I’ve been keeping an eye on a house near me that has been vacant for awhile, maybe 3 or 4 months. This home is owned by out of state landlords and they have had fairly frequent turnaround since they bought it in 2008 for $315,000. Assuming they put 20% down on the home (since its not their primary resident) then they have perhaps $55,000 in equity today. Currently we are in a hot area for sellers and landlords because of the school system so homes are not vacant long and this one is not currently being advertised for rent which surprises me since its been sitting vacant for awhile now. Rents for this particular sized, 4 bedroom home are going for about $1400 a month. I found the owners’ out of state address and would like to approach them about their home. It is worth around $250,000 and it may need about $10,000 worth of upgrades but I wont really be sure until I see the inside.
I don’t have the cash to buy it outright and I’m certainly not going to get a conventional loan so these are what I think my options are:
1) Offer to buy it with an option to find someone else to buy it. “Mr. and Mrs. Homeowner, I’d really like to buy your vacant house but I myself will not be living in it because I have someone else in mind to move in so I’d like to have the right to purchase your house for the next 30 days so the family can get their paperwork in order (not sure how to word this part). I will accept your house in As-Is condition. I also wont need to bring in a realtor and I can offer you $240,000 with the understanding that I will be doing at least $10,000 worth of repairs and upgrades, if not more.”
2) Offer to Master Lease the home. “Mr. and Mrs. H, I’d really like to rent your home but I have the perfect family in mind to live there, not myself. I would like to officially lease it from you both and then sublease it to another family, not my own. I will be responsible for paying you the rent each month whether someone is living there or not and I will pay you $1100 a month for a year’s lease. When the tenants call for repairs in the middle of the night, I will be the one to handle any issues and will get 3 bids on any repairs over $100 for you to ok ahead of time.” Really not sure how to word this one either.
3) Ask for them to seller finance so I can find another family to move in and collect a substantial down payment. “Mr. and Mrs. H, I’d really like to buy your home but we just don’t have all the money right now to do so. But I can come up with a decent down payment and make monthly payments to you on a lease to own scenario. This way I can pay you full retail price (minus any major repairs or issues there may be with the home).” Again, my wording is not quite right.
Looking for suggestions.Elizabeth,
I would first just send them a simple letter saying that you are interested in their vacant house and see if they can give you a call. Even better if you can get their phone number just give them a call. I like to go in softly at first develop some comfort with the sellers first. Get a feel for them then any of the options you presented seem well crafted.Elizabeth
Get a phone book. they may be listed in the WHITE PAGES. Ask the neighbors if they have a phone number (they usually do)
The language in your offer is WAY TOO much to say before you have even questioned the home owners (and they have questioned you).
You need to know more about the house, the condition, the mortgage, the payments, their personal situation, etc etc. They need to trust you and feel like you are a professional before they will say yes to any offer you propose. But you cannot make ANY kind of an offer until you get a lot more information.
I’d put a “We Buy Houses” sign in the yard – that might get their attention or the attention of someone who is watching the house.
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