Hello Everyone,
I’ve just finished visiting a lady about a lease purchase option.
It is for a 3br/2.5ba townhouse in northern sydney.
The bank valuation is $480k, she said she may take $460k. (Advertised with an agent at $520k)
Market rent is $390/week.
Background information: She is a RE agent (been in the business 66 years!). She knew all about what I was talking about with a lease option, and said that she would be open to do this. The condition of the place is great, no need to do anything. Body corp is $400/quarter.
So it sounds fantastic to do a lease purchase, but the problem is she needs some money upfront to move on to a smaller place. She does not need all the cash though, and will carry the rest. I mentioned that I have preapproval for $350k, which would be fine.
So as an exercise, do you reacon you can turn this into a deal or not?
Josh
hi Josh,
what are you proposing to do
Buy and Lease option?
or
Sandwitch LO with the owner?
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
[email protected]
phone 0412 437 582Well I have to give her some money, so I guess I would have to buy. I can’t see any other choice.
But she will likely carry the rest so there would be no money down. Unfortunately I do not want to use all my borrowing capacity for this deal.
I could probally find a tenant-buyer first and then proceed with the sale.
My 2 problems in this circumstance are:
* Using up my borrowing capacity
* Payments on a mortgage would be quite high for $480k, would I be able to cover it with the tenant-buyerOriginally posted by JoshJ:Well I have to give her some money, so I guess I would have to buy. I can’t see any other choice.
But she will likely carry the rest so there would be no money down. Unfortunately I do not want to use all my borrowing capacity for this deal.
I could probally find a tenant-buyer first and then proceed with the sale.
My 2 problems in this circumstance are:
* Using up my borrowing capacity
* Payments on a mortgage would be quite high for $480k, would I be able to cover it with the tenant-buyer***************************************
Dear JoshJ,1, If the present Sydney market conditions is such that it has already bottomed out and on its recovery phase, then I will agree with what you are doing.
2. I really cannot understand what you are doing here in the present declining Sydney market conditions whose price decline is likely to be prolonged over the next few years. What is the level of risks involved vis-a-vis the likely profit returns on investments?
3. Looking forward to hearing/learning from you soon,please
4. Thank you.
regards,
Kenneth KOHIf she will carry, why don’t you get a no docs at 65% LVR. That way she gets a big hit upfront.
Hellman
May I suggest a couple of things here…
1/ A letter from her lender which is pretty standard stating the payout figure from the property in order to release title…this is different from loan balance letter
2/ You don’t mention how much she needs upfront which is important to know
3/ in this market I always mention to sellers and get them to agree that since this is a fair deal for everybody they won’t mind if I test the market first before my obligation takes place under their existing mortgage
http://www.rickotton.com
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