Purchase Leaseback To Builder/developer For Models
Has anyone done or analyzed one of these deals?
I have been presented w/ a deal to buy a group of houses at 69%, and then lease them back as the models for the subdivision.
They will guarantee a 1 yr lease and then go month to month.
The rent they will pay is libor +4%/month.
Seem like a good deal except for the exit strategy at the end of the lease or rental period.
Thanks
I have been presented w/ a deal to buy a group of houses at 69%, and then lease them back as the models for the subdivision.
They will guarantee a 1 yr lease and then go month to month.
The rent they will pay is libor +4%/month.
Seem like a good deal except for the exit strategy at the end of the lease or rental period.
Thanks
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the libor +4 is how the rent is calculated. If the houses are 1M and libor is 5%(+4) then the monthly rent payment would be 7500.
As for the clawback I have little confidence that the prices will hold, since according to their website they are selling at 69% to EVERYONE.
I am going to send in an LOI just to get clear on the terms, as the broker mentioned 15K down which makes no sense on a $1M loan.