Ok, so we have a seller who wants to sell on a land contract & my thoughts were we could sign it up like we do with a lease option but instead the terms would be the land contract terms & then pad our fee to the sale price (like with a lease option flip) & then assign our position to our buyer for our fee.
Or we could get a straight option for the land contract terms & find the buyer, then release our interest with the seller for a fee from him (the seller).
My question(s) are..
1) Which way is the simplest/cleanest to do.
2) I've never done a straight option assignment to a seller, so I'm not sure if it works the same way where we pad our fee into the sale price term (above the sellers price) which creates the money spread the seller would pay us for the release.
3) If we do a straight option, do we just get the option with the sellers terms, & market for buyers with the higher sale price amount (I’m trying to figure out where we add our fee in so it make sense to the buyer in the paperwork).
I know Adam King had a place in his lease option paperwork where you could just select a land contract instead of a lease option & simply fill in those terms. Then you would just pad the sale price by your fee amount like with a regular lease option assignment deal.
I’ve heard about straight options a lot, but I’m not sure exactly if it’s the right instrument to use for this kind of deal (or what it is best for).
Thanks for any help!
UPDATE - FORGOT...
I figured I'd put in the numbers to possibly make it easier. We can get the option to purchase for 380k with 30k down to the seller (the seller owes 300k, so he wants 30k upfront & will get his other 50k on the back end).
We are going to market it for 400k with 50k down (30 will go to seller & 20 to us). This is also why we are talking land contract over lease option because of the large size of the money down from the buyer.
The seller wants his monthly PITI payment of 2500 month covered, so we'll need to figure out what % that works out to over the term before the balloon is due (probably 3 yrs).
Anyway, I'm leaning towards doing it like a lease option flip where I get a contract with the seller for his desired terms, then add in my fee above his sale price & assign our position to the buyer. I just wanted to check if there's something possibly easier like with a straight option.
I'd rather just have an option & then release for a quick payday than have to fill out an entire contract for deed contract to assign over to a buyer (never did a contract for deed before).
Edited by JvM, 19 August 2013 - 06:15 PM.