"subject to existing financing"

[tlpadil 0]

I'm sorry, another newbie question. What do they mean by "subject to existing financing"

 

tomas

[MichaelC 160]

This means you are buying a property and taking title to it with existing loans and liens in place. You are agreeing to accept the responsibility for making those payments and keeping those obligations current.

[tlpadil 0]

This means you are buying a property and taking title to it with existing loans and liens in place. You are agreeing to accept the responsibility for making those payments and keeping those obligations current.

 

Does this mean the property is deeded over to me? Is this what normally happens in a sandwich lease option?

 

Yesterday I sat down with a list of twenty FSBO numbers that I got from a 3 month old newpaper. Out of the twenty most were already sold, some were disconnedted numbers, some had stated renting, but three want to talk with me. One of them was the $730k. Another had a property appraised for $285k. He would like a 3yr lease and 5% down? He said he could come down from $285k. I have a meeting with him on Sunday. He has it rented to a lawyer for 1300/m, his mortgage is 1400/m. This also has potential.

 

tomas

[JerseyJeff 0]

Another had a property appraised for $285k. He would like a 3yr lease and 5% down? He said he could come down from $285k. I have a meeting with him on Sunday. He has it rented to a lawyer for 1300/m, his mortgage is 1400/m. This also has potential.

You lost me at the he wants $14k+ down. Some people are willing to pay the seller option up front for a long-term lease with profit potential, but he is asking the appraisal value and is already taking a loss on rent. I'm not seeing where the potential is here. What are your thoughts on how you see it playing out?

 

Jeff

[tlpadil 0]

Another had a property appraised for $285k. He would like a 3yr lease and 5% down? He said he could come down from $285k. I have a meeting with him on Sunday. He has it rented to a lawyer for 1300/m, his mortgage is 1400/m. This also has potential.

You lost me at the he wants $14k+ down. Some people are willing to pay the seller option up front for a long-term lease with profit potential, but he is asking the appraisal value and is already taking a loss on rent. I'm not seeing where the potential is here. What are your thoughts on how you see it playing out?

 

Jeff

He says he can come down from 285k. I might offer full price if he comes down on the option and for a longer term? I was planning on offering 5k down. The current tenant has a contract until March of 06. What would you suggest?

[Doug Pretorius (ON) 9]

Here's what I'd do... apply that $5k as prepaid rent. So $5k divided by $1,400 = first 4 months free. This way he gets the security of receiving money upfront, but you get it all back within a few months from your buyer.

[JerseyJeff 0]

I assume you are setting this up as a sandwich lease option.

 

What can you get his rent and purchase price down to, and then what can you market purchase price and rent for? This will give you the spread you have to work with and monthly cash flow. When you have these numbers you'll be able to make a better judgement on how/if you should proceed. Also, obviously, the more years the better.

 

Jeff

[MichaelC 160]

Does this mean the property is deeded over to me? Is this what normally happens in a sandwich lease option?

tomas

When buying subject to, yes, the property is deeded over to you. In a sandwich lease, however, the title remains in the seller's name until you exercise your option to buy.