Spurring Up A L/o

[news754 0]

Spurring up a L/O

 

I like to no if you should L/O a house that need the interior redone to make up to date?

 

Lets say it needs $10,000.00 to make it appealing to buyers.

 

I could probably get the house at $40,000.00 or maybe $50,000.00 below market.

 

Would the owner have any say in the repairs and if I don’t L/O the property do I have any recourse?

 

Thanks

Dean

[Kimberly 0]

Tony does this, but I'm thinking he buys conventional (gets a loan). You might go through some of his old posts.

 

In general when doing a sandwich lease or cooperative assignment you are looking for properties that don't need much fix-up, just the cosmetic stuff. Also, you aren't usually the one doing the fix-up, your tenant/buyer is!

 

You could do a sandwich lease and would want at least 3 years, but if you aren't positive you're gonna be able to sell it, I wouldn't recommend sinking money into it. A better thing to do, in my opinion, would be to get an option on it and flip it to a rehabber -- you're in and out quick without much if any liability.

 

You could also do a sandwich lease and have a rehabber for your tenant/buyer, but if they have to do do much work, sink in too much money, you begin to get into an area where there would be a question of them having equitable interest.

 

I'd never recommend you hold a property unless you have a significant reserve fund for emergencies -- tenants not paying rent, unexpected major repair, etc.

 

Would the owner have any say in the repairs and if I don’t L/O the property do I have any recourse?

It depends on how your contracts read.

[MichaelC 160]

I like to no if you should L/O a house that need the interior redone to make up to date?

If the numbers make sense, definitely! I love to find these kinds of deals, and then take control of the property with nothing out of my pocket. Having done so, now I have a few choices.

For example, if five to ten grand in fix up can recoup twenty to thirty grand for my troubles, then I just might have my fixer guy go in, do the deed, and then turn around and try and sell it outright for a fat, fast profit.

Or, I can take the property as is, and offer it as a Rent to Own as is. I explain to the prospective tenant/buyers this is a great opportunity to homeownership via sweat equity, and that for their troubles I will give them an unheard of 50% rent credit, (even more if that's what it takes to move the property). I have a real life example of this type of deal here.

In this case, the homeowner was thrilled to have her "problem property" off her back. I was happy with my deal. And the t/b's who moved in became homeowners in twelve months.

Would the owner have any say in the repairs and if I don’t L/O the property do I have any recourse?

What Kim said regarding the repairs you can make. Personally, my agreements require written permission from the homeowner before making any repairs. This is for my protection as well as their's. I will tell you from experience that I have yet to meet a homeowner who said, "No. I won't allow you to paint, replace the carpeting, and upgrade the bathroom." I mean, what have they got to lose?

Beware, though, that if you sink in any money, you have no legal recourse to get it back if for any reason you don't, or can't, exercise your option to purchase.

[<Steve> 82]

I have a real life example of this type of deal here.

That's a nice deal MC on a fixer and the $17K makes it all the nicer.

 

Like you said it depends on the numbers and the seller's motivation wether a fixer L/O can work. Is it worth putting energy into finding and L/O fixers like this? Or is it better to keep this technique in our bag of tricks just in case we stumble across a fixer opportunity?

 

If so any ideas of the kind of marketing to find them.

 

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