Deal Help Appreciated!
Seller has a very pretty house in a very nice neighborhood. Market value is approx $510K. He owes $410. He's willing to sell it subject to for what's owed, and to take back $50K in equity in a 5 year balloon note, with annual interest only payments before note is due (7%).
Has a 1st mortgage only. It's a 5 yr ARM, current rate at $4.9%. 1st mortgage payment is $2200.
House essentially needs no work.
Doubt I could get a tenant/buyer in less than 3 or 4 months.
What do you think about lease/optioning it from the seller for five 1yr terms, with my right to get out after 1 year at my option.
What are your thoughts? A deal? Would sub2 be better?
Thanks for all your help!
Martin
$2200 for a 510k house is a pretty small payment. Even so, If you really think it'll be difficult to get a tenant or buyer for that long a time frame, can you make the payments in the mean time?
I would only do this as a sub2 with a 1 year term, lowball the price to about 490k, and try to flip it at a low price on the market.
Just a thought.