Posted by Chris on March 01, 2000 at 14:22:09:
Are you giving the tenants any rent credit if they exercise their option to purchase?
L/O Problem need HELP - Posted by Marcus
Posted by Marcus on March 01, 2000 at 14:12:06:
Hey Everyone, GREAT site.
I have a house that I just got a mortgage. The tenant at the time was going to purchase the property. Rent was 650.00 and was increased to 800.00 to cover the mortgage. Tenant backed out and is moving at the end of the month.
How would I set a fair Down Payment and monthly Lease price. I have put an add in the paper and I’m getting a ton of calls already.
FMV of the House is 90,000
FMR is only 750
I was asking for 3000 down and 950 a month, but the people really seemed like that was too much. Is it too much, is it a fair price,
How should I set this thing up. HELP, HELP, HELP
Thanks for any help.
Re: L/O Problem need HELP - Posted by Bill K. - FL
Posted by Bill K. - FL on March 01, 2000 at 14:47:17:
Hi Marcus,
I am not surprised your phone is ringing off the hook if your rental market is as tight as m ine is. Do you think most of the calls are from renters or buyers? You didn’t say which section you placed the ad in. Do you want to sell or are you content to keep the house if the tenants don’t buy? Or don’t you care. That will determine how you set up the L/O. If you want to make sure they buy, increase the option money up front. The more they stand to lose the harder they will try to find a loan. 3-5% of the purchase price is normal. I will then credit the option money to the purchase price. If you need/desire more monthly cash flow, offer to credit any amount above the FMR to the purchase price as well. With regard to the purchase price, I would set it at the upper limit or a couple thousand above. (After all how L/O deals do they have to pick from?) Also, make sure you screen the tenants like you normally would.