my name is carlita and i’m a newbie to this and just searching for sound advice, i;ve connected with a motivated seller, seems this deal just fell in my lap, but unsure how to present this seller purch prop 1 yr ago for 466K, ask 510-530k, owes 372,797.28 on the first, with 4.850% interest only, he has a sec of 92,981.44 with apr 7.75 annual he is willing to do an l/o for 5 yrs with a decent rent payment of 16-1700, he also needs to stay in prop for 2mos, my ques on that can i do a sub-lease with him, and how can i structure this lease, there is a girlfrnd involved, they do not want to carry , they want to be rid of any and all financial obligations as quixk as possible, and can i pick up this prop sub to the second is this at all possible. I want to do this right, without creating serious mistakes, what would u recommend i do, Pls Help
carlita
Your message is a little confusing (why are you mentioning *his* debt levels and interest rates?), so I hope my partial response is not off track.
I would try and bargain down the price if he is as eager to sell as he sounds. Equally, I don’t know where you are buying, but a good proportion of the country has had very little capital growth over the past year, so for him to be asking for about 10%-12% increase on the property price from a year ago sounds a bit rich. You obviously know the area and are in a better position to decide this.
You should talk to a solicitor about what clauses you need in the contract if the vendor is going to rent back the the property from you – usually there is a 30 day settlement period anyway, so it would only be one month rent. This is in their benefit rather than yours (unless they sign a longer lease agreement), so you should use it as a bargaining chip to lower the property cost price.
As for the rest of the question, I am a bit confused about what exactly you are asking.
Please clarify clearly of what the deal is and what you want to achieve.
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I also think that a 10-12% gain in one year is a bit rich unless the seller has made considerable improvement to the property. Either way, I would get a valuation done if I was (for some reason)sure the deal is worth it.
Also, From what I understand the owner is living in the property and wants to pay rent for some time. According to my calculations (from the figures you present) this represents negative-gear for you and the seller wins high throughout the deal. In this case I would study carefully my options in the oportunity cost (your cost of not investing your money somewhere else).
[thumbsdownanimLatinoz
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