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alexlocklear85

..Just walked right into a SLO.

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I placed an ad earlier on craigslist about how we can help sellers lease-option their property.

 

I got a call from a lady who is very motivated to move down to Orlando and wants her house occupied. We talked for a while and then she mentioned how "yeah, obviously if we move to Orlando you're going to be the one managing the property, right?"..I had no idea what to say at this point; I guess that's an issue that arises with being a newbie.. :blush:

 

So then I quickly responded back that, yes, I could make sure the property is being kept up. Her mortgage payment including everything each month is $911; she would, however, like to make at least $50-100 each month herself...I don't know what the rents are in the area, but will most definately check that out. Her house was appraised in April of last year, 3 different times (don't ask why), and they all came back at 162k; she's willing to do an option w/me at 155k. And I was planning on setting the new option price w/my TB at 165k.

 

Did I do something wrong?? Is it okay that she's going to be moving to FL and I have to "manage" the property? Any issues here?

 

Also, she wanted to know if her insurance policy would change to just include her property now and not include personal property?

 

I know there's no way to fully protect one's self when doing a SLO, but what are some things I can do?? I know I can set it up to where I pay the owner's payment each month..and I know I can record my option. Is there anything else to make me more protected?

 

Thanks so much guys and gals and I know this was a very long post!!!

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Alex, this deal doesn't work as a sandwich lease. Too skinny, I'm afraid. There's not enough of a spread between what you will be paying the homeowner and what you can expect to receive from your t/b.

And forget that appraisal price. First, if this is a true appraisal, (and not some Agent's market analysis, fudging the price to get the listing), it's about nine months old. In Florida, that means the value has dropped 10% since. You'll be overpaying and you'll never find a t/b to meet your price, leaving you stuck with a vacant property.

Your only choice on this is a Cooperative Assignment, or a Lease Assignment. You'll make your money upfront and be out of the deal.

Is it okay that she's going to be moving to FL and I have to "manage" the property? Any issues here?
I don't know NC law specifically, but I'll wager that you are required to be a licensed Realtor to officially manage property. Now, with that said, who is watching these things? The Real Estate Police?

I've helped a number of homeowners on a casual and informal basis in similar situations. Just be careful about giving legal advice and getting in the middle of any squabbles. Your "managing" should be pretty much limited to driving by on occasion to view the outside of the property, or locating a handyman to repair a leak.

Also, she wanted to know if her insurance policy would change to just include her property now and not include personal property?
Yes. She can transfer her policy from a homeowner's to a landlord's. The difference is the landlord's policy doesn't cover possessions in the event of robbery or damage, meaning the cost of the policy is less expensive.

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