I am preparing a lease purchase proposal for an unusual home in a rural area. It is a smallish house (2BR/2BA) with a hangar and workshop building on a private airstrip in the boondocks. All the lots around the airstrip extend to the centerline of the runway, so it is communally owned with access protected by the HOA rules. The home is FSBO, and they have no appraisal, inspection, or anything. They built the home 10 years ago (paid cash, so no mortgage on the property), and recently decided they would rather live in their second home in the mountains permanently.
I have three main problems:
1. The asking price is $300k (no appraisal, mind you). This is twice what the tax assessor valued the house at last year. There are other properties currently for sale at the airport, some vacant lots, some with a hangar only, and one with a mobile home. Nothing is over $150k. There are no recent sales within 40 miles, other than tiny lots with mobile home selling under $30k and giant farm estates over $500k.
2. There are no rentals within 40 miles. Not even on Craigslist. Not even apartments, rooms for rent, etc. This is farm country bordering wilderness. How am I supposed to determine market rent rate? Zillow suggests $1100/mo.
3. The property is deeded as a Life Estate (the owner is elderly and it's set up to pass to his son). I don't know anything about life estates, but from what I recently read, they seem simple enough. Will this have any bearing on the situation?
I may have the opportunity to sandwich this for 2 years and actually net money by leasing the home and hangar separately.
Thanks in advance!