What Is Fair?
I have a property I have sold to an investor on a L/O. He tried to flip it and we agreed to a 6 month L/O. He put 7K down and is paying $1000 a month which is JUST my taxes and mortgage.
The six months are up and he wants to extend the L/O. Well I need to have the property sold by the end of the year due to a baloon note I have due then.
I would extend it but I want another L/O payment and the sale price would have to go up as well.
I am selling the property to him now for $134K he is trying to sell for 179K and has since dropped the price to 169K.
What do you experienced investors think should be a fair price and option payment again. I WANT to be fair BUT at the same time this is business.
I generally go with what "feels" right to me. That said you have lived up to your end of the obligation and he has been unable to.
I might give him 90 days for a fee if he was going to refi out of it at that time. Otherwise I would have him vacate and sell it myself after a quick spruce up to put it on the market.
a win-win is desired (not a he wins you lose...)
As long as you were clear going in to the transaction and you have honored your part of the bargain I would say that anything you want to do would be fine (up to and including evicting him and selling it yourself at 160K or more).
[addsig]
Lots of us made bad deals in our earlier years. Fortunately you have an option, so therefore all you have to do is not exercise your option and forfiet your option fee/deposit.
He has no obligation to give back your fee, nor should you expect it. You were an adult signing a contract. Take your lumps, learn from the experience and move on.
Your next entry into RE will be wiser, I assure you.
Tbird is right. You have little choice but to walk away and take your lumps... in this case it means leaving your $5K behind.
One thing you will learn in this RE game is that the rules are usually etched in stone (and law) and personal circumstance, condition of collateral, etc, have no bearing on the situation.
A written contract with a non-refundable deposit means exactly that. No refunds.
[addsig]
It will be the same way if you buy another house. You can’t get a refund back.
It is up to you to have an independent inspection of a house or car before you buy unless it came with a written warranty.
This is how some investors make money. Now he can get another 5K from someone each year if they don’t stay. It could be worse, you could have put 10K down.
Your best bet is to explain to him you cannot afford it and see if he will let you out of the lease. If you just stop payment he can take you to court to collect some damages for his cost to re rent.
You would have to prove that he gave you a warranty on the house or that it was unsafe to live there and you tried but he refused to fix only the unsafe items. But then again depends on what your lease said. It may say you are responsible for repairs.