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Learning and Burning

Due date coming

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I have a lease option that iv had now for almost 60 days that first payment is due on 4/1/16. Iv gotten lots of attention but still no real takers, I m stressing now with the payment due and not sure how to play this one out. Talked to seller today who is out of state and hes stating he can not extend me another month to get it filled and is expecting payment. I am looking for suggestions to keep this one going amd work for everyone?

 

Learning, Burning and stressing this one....

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This is a sandwich lease, I assume? Then you are on the hook for making that payment unless your agreement states otherwise. There is always a risk vs reward aspect to all these deals, Mike. More potential money when doing a sandwich lease, but the risk also increases.

You noted lots of attention but no takers. Have you followed up with these folks and asked why? Is the price wrong? The rent too high? It doesn't sound like a marketing issue as much as it is a numbers issue.

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There has been no haggle on the price. The monthly seems the issue. Scenario is this house has central air and heat but on solar. So payments include the power bill. So for reality its a no brainer. NO power bill with ac in the desert imagine that. Feedback is yard to small. to close to town. To colse to neighbors. So again not the price. I am now working on 5 k and take over payments of $1200 power bill included.. Getting more bites but still no fish... Grrrrr.

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Man still working this one like KRAZY. Worked all the interest in the last three months and again no real issue other then small lot/to close to town. Nothing on price. So i am on it still. Had a couple showings and a no show this week already. Now per my agreement i am abligated to pay one months rent and 30 day written notice to give the house back line 21 Lease w/option to purchase agreement. Certainly NOT what i want to do, but what can i do beyond giving it away? Seller is cool and understanding but i have to reconstruct this one or take my hit.... ?????

 

Learning Bburning and stressing

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Yeah, pros and cons, Mike. Pros and cons when you do these sandwich type deals. More profit potential but also additional downside risk, such as a vacancy. As you noted, the contract gives you a legal out with minimal damages to your pocket. While using that weasel clause isn't out intent when doing these deals, as you can see it's there for a reason. Short of marketing as you already seem to be doing, and short of talking to the homeowner and negotiating new terms, there isn't much else you can do to alleviate the situation you find yourself facing.

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Update on this one. I got the owner to split Aprils rents with me so the hit was minimal. (Still hurt) I did get the house leased before May was due. Wondering if you have done this before? Its a 6 month lease that takes the pressure off for a bit, but still marketing for a buyer on this one.

Also, a question is if the seller only wants what is owed on the property. And i have a 36 month lease option what would i put in the purchase price when option execised?

 

Lerning and burning still........

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Also, a question is if the seller only wants what is owed on the property. And i have a 36 month lease option what would i put in the purchase price when option execised?

You can try and figure out the precise amount via an amortization table; you can estimate the amount; or you can write in something along the lines of "Purchase price will be the balance of the mortgage at time of closing".

Problem with that is that can be construed as an "illusory contract". Meaning, a key component is missing: the purchase price, in this instance. It can lead to legal hassles down the road should someone try and get cute. It's unlikey, Mike, but be aware that the possibility exists and when it comes to money some people can be jerks.

Curious: what is the current balance? Have you confirmed the amount owed and also if any other liens exist? And what is a conservative and realistic value of the property today?

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Any update on this? Were you able to find a tenant buyer on this one before the 6 month lease was up?

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