Lease Option Question From Newbie..Please Help
I am a Very Newbie investor in Maryland. I have the opportunity to purchase 2 properties in Georgia via Lease Option...... here are the figures....
The "investor" wants to sell both properties at 98K each...FMV on each is about 115K. He is asking for 5000 down on both properties and monthly payment of 750.00 each. Both properties already have tenants paying 790.00 each. I dont know about you but to me, there is little to no real positive cashflow. How could this ever be a "good: deal for me>? I appreciate any advice you can give me....and by the way, i realize I need to do a little or a lot more studying up on Lease Options 
thank you
Wayneone,
Talk with your Mortgage Broker about the many different directions you can go here. You would be better off getting your own loan on this deal to improve your cash flow.
From another post I just answered for you, I know your just starting out. Make sure you do all your due diligence on this deal.
You must also decide if you want to manage a property that's in another state.
Good Luck.
Dave
[addsig]
Dave,
....Any and all advice is appreciated. thanx again.
Thank you so much for your response. Believe it or not, I dont even Have a Mortgage Broker at this point. I guess I really need to do my homework :-D ....Also, in reference to "due diligence", would you suggest that I do a land trust and become the beneficiary? I have read so much on this. Most say to just move forward with the sub 2 since Lenders rarely ever require the loan to be paid in full.....My luck....the lender will exercise their right this time
I would say that it depends alot on your exit strategy and if you feel the home will sell in a reasonable amount of time. Is there any rehab that needs to be done on this property? If so, how long do you think it will take?
I have not had a lender exercise the "due on sale" clause but that doesn't mean it never happens. However, you must have a plan of action if this occurs. Remember though that even if the bank does exercise the due on sale, you should have enough time to sell if you are in a good market. What is the average days on the market that like homes stay on the market in your area?
Dave
[addsig]
I thought you said you were going to purchase via lease option. If that is the case you don't have to worry about DOS clause because their is no change in ownership at this time only when you excersice your option would you have title change hands at that point you will already have a buyer or tenant/buyer ready to close or L/O from you(if you make sure you have the ability to sublease in your contract) When you say the "investor" wants 5000 down, do not mistake that for a down payment if your doing a L/O. It is only option consideration - if all or any part of that money is directed by the contract toward the future purchase of the property you will cross tenant/landlord boundries into a buyer/seller arrangement which would mean the difference between eviction and forclosure as the sellers remedies. If you plan to renovate the property a lease/option purchase is probably not for you as you would in fact be dumping money into a property you don't even own yet. Could have some problems there.