Seller talked too much... - Posted by Debra-SC

Posted by Karl (Oh) on March 20, 2001 at 24:05:46:


Does the profit that you might make from this deal justify the risk? Are you going to put yourself in the middle of a lease/option deal for a measly $750? That?s not much profit for the liability you?re going to be taking on. It sounds like the seller messed up this deal for you. I would un-convince her that she needs you, and let her lease the home directly to her buyer. By not keeping quiet like you requested, she stole your monthly profit on this deal. Of course you don?t want to rent to own without positive cashflow. That would be bad business.

Can you renegotiate the monthly rent to add some cashflow for you? Maybe. But can you do it without the buyer feeling that somehow they?re getting jacked around? That would be a trick.

I?m in the middle of putting together my second lease/option deal. The seller owes $14k at $165 per month. I?m taking over their payments. I showed the home tonight to a lease/option buyer for $18k. He agreed to pay a $1500 option fee, $400 a month, $200 applies to purchase price, $200 is rent. If he pays on or before the due date, an additional $100 out of the rent is applied to the purchase price. If he doesn?t exercise the option and moves out, I?ll give him half of his option money back if he?s current on his payments and the home is in good condition (tape 7, side 1 of Lonnie?s Home Study course). After three years, whether this guy purchases the home or not, I?ll have cleared around $8500, with no money into the deal. I don?t like being on the hook for a $14k loan, but the profit from this deal makes the risk worthwhile. Ask yourself the same question on your deal.

Karl Kleiner

Seller talked too much… - Posted by Debra-SC

Posted by Debra-SC on March 19, 2001 at 15:17:56:

I have been trying to find a cash buyer for mh a couple is trying to get rid of. they are making 2 mh payments - one they live in, one they don’t. Seller has found someone on her job who is willing to L/O from her and I convinced her she didn’t want the responsibility of collecting rents, etc. and it would be better if she let me handle it by doing a L/O with her and I would in term do a L/O with the buyers. She readily agreed to that. The buyer called me today, I got their applications filled out. Everything was fine until I got down to the monthly payment. My zealous seller told the husband (who works with her) the payments would be $229 plus $46 for insurance. I had already told the seller NOT to discuss any money with them and that I would handle it. Anyway, I won’t be getting a montly spread because they are all set to pay $275/mo for a 1992 4bd/2ba mobile that I could have gotten $375/00 easily (grrrrrrrrrrr). I did manage to get $750 option fee. I almost didn’t get that because when the husband/buyer kept asking how much was down payment, seller just kept saying “I JUST WANT TO GET RID OF THAT HOUSE!” I told the buyer/wife that she was not suppose to discuss $$ with you and I told her it would be $750.00. she seems alright with that. Is there anyway I can re-negotiate the monthly rent, or should I just leave well enough alone. I really do not look forward to doing a rent-to-own with no money coming in monthly. Any ideas? BYW- we meet tomorrow to fill out all the paperwork.