Vendor Finance or Rent to Own- Please Help??

Hi Everyone,

I have a deal that I need some help on please to see if it is worthwhile doing and which way I should go – Vendor Finance or Rent To Own.

Vendor owes mortgage $250k – he advertised it for $270k.
2 level townhouse 2 bdr 1 bath lock up garage 3yrs old 1 of 8 in block
across road from major shopping centre (Highpoint) & tram stop outside, etc House is in Maribyrnong.
currently rented for $910 ($210 p/w)
market rent is around $1040 – $1100 ($240-260 p/w)
Mortgage payments vendor owes is $1379 p/m so is only getting $910 in rent. (He just wants to get rid of it as he owes too much now negative gearing it.)

I was thinking of offering him $255k and then possibly resell it straight away before it settles at $295 or $300. (Which I’m sure he will gladly accept to get rid of it)
Valued 1 yr ago by his current bank at $305
New bank valued at $285 when he wanted to refinance 2 months ago
I was thinking of offering the new purchaser no deposit to get them to buy and in straight away. How do I also get my stamp duty paid for in this? Also is there any way because he is selling to get rid of his tenants and have a vacant possession?

OR do a rent to own with possibly the current tenants if they qualify or find someone new.

My brother (who knows this vendor) is in the bank and was also a mortgage broker said if loan was to stay with current bank that already pays the mortgage value would stay at or near $305k. To go to new bank possbly only value at $285k. Other townhouses in streets behind this one sell for around $285k-$310k.

Any help on how to structure this deal would be greatly appreciated as this would be my very first deal. Thanks heaps. Sorry if it is too long winded!!

Regards Andrea [biggrin]