Possible Lease/Option - Posted by Mike

Posted by Zack on January 14, 2003 at 20:54:34:

I think the best way of finding out about the rental market is to ask a property manager and check the newspaper. If it is an area with alot of rental properties you may want to talk to the neighbors and see what they are paying, just keep in mind this may vary significantly from person to person for a variety of reasons i.e. related to or friends with the landlord, been in the house for a long time, doing work for rental decrease, etc… Would you pay $1000 per month to live there? if so it’s probably a fair price.

Possible Lease/Option - Posted by Mike

Posted by Mike on January 14, 2003 at 19:57:46:

I recently had a call back on a possible lease option. Here are the facts…
The seller’s movtivation comes from the fact that he bought this property for his 1st. rehab He spent too much and needs to get out from under the debt. He is advertising the house as a FSBO at 118K (per a recent appraisal) for a 1450 sqft house…$81/sqft. Comps in the past 6 months have been in the $69/sqft range. His debt is $100K, with payment of 920/mo.

My thoughts are, after signing the l/o… to allow a 2 to 3 month search for a t/b (whereby seller is still making payments), guarantee his monthly payments and maintenance thereafter, with a option price of $100K (his debt balance). I would then seek a t/b, for a 3 to 5% nonrefundable deposit, and a rental price of $1000 per month and an option at $118K.

I am not sure about the rental of 1,000 per month…what is the best way to gauge the rental market?

Comments or suggestions about the deal itself?



Re: Possible Lease/Option - Posted by Tom (WA)

Posted by Tom (WA) on January 15, 2003 at 06:12:35:

If comps in the area are $69/sq. ft., I want to pay $60, not $81.