Re: Advice Please - Lease Op with variable rate? - Posted by Matt B
Posted by Matt B on June 29, 2001 at 11:02:11:
This doesn’t really look like a decent deal. There are a few problems with it. Number one is the variable rate. Now you could simply write this up with your payment amount on the agreement, locking that payment amount in for you. However, you would need to impress on the seller that if the payment went up, they would have to cover the excess. This could be a HUGE headache to make your payment, then make sure that the owner makes up the difference.
Then you have the payment that is $100 above market rent. Now I have done a few like this because I realize that it is still possible to charge a little more for a lease option. However, this is still a problem to factor in.
You also have a house that needs work. (Paint and carpet) Again, I have done lease option deals like this and simply had either my buyer or seller make the necessary repairs. But there is more to consider here.
Finally, you have the purchase price. Again, I have done deals on houses with only $1,000 worth of equity, but there are other factors to consider here. Add up all the negatives, and it looks like they outweigh what could be put together as a good deal. Sorry, but put all that together, and I’d walk from this one.