Jump to content
The forums have been archived and are now read only. Years of great info saved for your reading pleasure. Thank you! Visit us on Facebook: https://www.facebook.com/NakedInvestor/ ×
The Naked Investor Forums
lhenley

Should I Lease Purchase or Subject 2?

Recommended Posts

Yesterday, I talked to an Out-of-State owner, who's house is vacant. It was listed at $194k, but is now at $179k. I found it from the MLS Expired list. She's allowing an agent friend to put his sign in the yard, but she says she can sell herself.

 

She has stopped making payments, but don't know what the total arrearage is. When I asked what the approximate balance, she said that if her agent friend sold and got his 5% commission, she'd break even. This means she owes around $170k. Her mortgage payment is around $1,400 per month.

 

She wants it off her hands, but is open to a LP. Market rent would probably be in the $1,200-1,400 range.

 

Since she's open to a LP, should I persue it. And if so, how do I deal with the back payments?

 

Would I be better off taking it over with a Subject 2?

 

Thanks,

 

Lynn (FL)

Share this post


Link to post
Share on other sites

Lynn, lease options and back payments always make me nervous. That's not to say the deal shouldn't at least be considered, but be sure to do your homework, be prepared for the worst and have a Plan B.

Based on the numbers you presented, it sounds as if she has no equity in the house. If I'm looking at this property, I'm asking myself what's in it for me?

No or very little equity. No cash flow. I need to come out of pocket to keep the bank out of the picture. B) Why would I want this house?

Share this post


Link to post
Share on other sites

×
×
  • Create New...