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Sj900

More Money, More Complicated

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Hello All,

This Lease option deal just got more complicated.

Originally I had the deal set up like this:

Lease Option Price: 218,000

Option Fee: 6,000

Portion of option fee paid to seller: 2,000

Lease Payments: 1,600/MO

Rent Credits 200/MO

1year lease

I just got a potential t/b that has a bunch of money with little credit. Both husband and wives credit score is right above 500. They both work and have good jobs. The husband has 70k worth of medical bills and the wife has foreclosure 7 yrs ago, few medical bills and credit cards… Husband also thinks he should file bankrupctcy once in the home to get rid of the medical issues

Note: The seller needs 1,600/mo to cover mortgage

The potential T/b's propose

21,000 upfront, they want the money to work like this:

First 6 months of rent paid and then after the first 6 months rent would only be 1,000/mo based on the money given upfront. They would do a 1 yr lease if they felt they could purchase. but would prefer a 2yr.

How would you structure this deal to get me more than 4k, make the deal attractive to the seller and not take advantage of the tb's and actually put them in a good position to buy?

Btw, I will run their credit tomorrow. They would like to move in by Oct 1st and could give me the 21k this weekend.

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So their plan, is to put all the money they have down..rather then paying their bills.....not pay rent for 6 months...because lenders love to see a buyer not paying rent for 6 months...then only pay $1k a month, which of course will jump dramatically when they try to get financed...but..after moving in, they would like to file for bankruptcy....

Gee...I don't know why their scores are barely above 500....seems like they are financial geniuses.....

It's up to you, but I would tell them their whole plan is flawed, and if they want help, and want to actually buy, they need a better plan then what they propose.

Tell them not to file BK because of medical bills...lenders don't pay them much attention anyway, although they do affect the scores.

Tell them to put $6k down, then..here's a shocker...use the additional $15k to pay down bills...

If they can't afford $1600 a month, they shouldn't be in the house.

Now, they could put the money down towards the house, but the rule of finance is for every $10k they put down, it only lowers the payments by $100, so it's better to pay off debt with that money.

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My thoughts exactly. What a bunch of scammers. I think they are part of the 47% :P

Chuck says GONG! ... Next

 

So their plan, is to put all the money they have down..rather then paying their bills.....not pay rent for 6 months...because lenders love to see a buyer not paying rent for 6 months...then only pay $1k a month, which of course will jump dramatically when they try to get financed...but..after moving in, they would like to file for bankruptcy....

 

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Gee, How i hated everything about Canada, Ontario, insane taxes, crazy censorship program, astronomical car insurance cost,

then I hear those stories people down in states getting owned by medical bills.

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Thanks John, I think the idea of more money clouded my judgement.

That's often the case. Been there, done that. Many years ago I sold my soul for $3K in hundred dollar bills, delivered to me in a diner along with a botte of tequila. Needless to say the deal went south a few short months later. . .but I did have that tequila and the vanishing tenants left a cool scale behind with marijuana leaves strewn about.
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Gee, How i hated everything about Canada, Ontario, insane taxes, crazy censorship program, astronomical car insurance cost,

then I hear those stories people down in states getting owned by medical bills.

I'd rather have medical bills then socialism...but....the lenders aren't supposed to take medical bills into consideration, however...they do affect the scores..go figure...

Yes, Erik, you hit it on the head...

I never realized how people "worked the system" until I got into real estate...I was shocked.

I still tell the story of the physicians assistant that worked at Churches Fried Chicken instead of in the medical field because she could get Social Security Disability for her 2 sons that had "asthma" but only if she made less than $400 a month..

When people call asking if we take housing vouchers, I want to delve into what is going on...I ask them how long they've been on public housing...it makes me nauseous how many I talk to that have been on housing for over 12 or 15 years....hey...here's a brainstorm...get a JOB!!!!

I still remember in Dallas many years back, when the city workers spent 2 days at city hall protesting because some of them made minimum wage....it seems it's easier to protest then to put forth effort to find a better job.

On a side note...MC still has the scales and makes good money with them.....

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