Well yesterday I picked up my second sandwich deal. I found this deal about a month ago. This house was on the market for a little while and a friend who knew what I was doing told me about it and the story behind it so I told him I was interested and to give the owner my #. The house was expiring with the agent on may 31st so I told my friend I didn't want to deal with the agent so have the owner call me after the contract has expired. The house was on the market for $214k and it was worth around $190 so I wasn't worried it would get picked up. So 2 days ago the owner called me and I went to look at the house and then went home to run some #'s. I called the owner but had to leave a message and he didn't call back until yesterday. We worked out a deal over the phone and I went and wrote up the contract right after getting off the phone. So here it is. He paid $180k cash for it in sept 09' and put $10k into it. He bought it for him and his wife but after buying it and moving into it they realized the floors were to hard for his wife. It's only tile in the kitchen and wood in the hall but she is up there in age so it just didn't work for her so they moved back to their other house and just wanted to get their money back. I offered $188k with a lease option and the right to sublet and they excepted. I don't know if I am going to do a 1,2,or 3 year lease. I am really considering a 3yr so my #'s are for a 3yr but who can just change the them around for each lease to see my potential profits.The option is a little high but the rest I believe justifies it and the t/bs will be paying it anyway. I believe this is a pretty sweet deal but dg family you tell me what you think.
4br 2ba house. I will have pictures on my free dg site soon. It's www.realtysolutions101.com
3yr lease option and right to assign/sub-let.
Option Payment: $5k to be credited to purchase price
Rent Credit: 50% or $500 per month
3yr lease option
Option Payment; $5k
Rent: $1,300 to $1,400
Rent Credit: $100
Rent credit from owner: $500x12mnthsx3yrs= $18k
New purchase price for me $188k-$18k=$170k
$170k-$215k(t/bs purchase price)= $45k!!
But wait there is more! There is the rent which I will use the $1,400 in this example and will hopefully get that but $1,300 easily. There is a $100(rc) at time of purchase which is part of the overall profits and has already been added to the equation but THEN there is the other $300 so it would be $1,400-$100=$1,300 left. $1000 goes to my rent and that leaves an additional $300 a month to me as a bonus profit! That adds up to $300x12x3=$10,800!!! So my total profit will be $45k+10,800= $55,800!!!!!! Oh and one more bonus I don't have to make a payment until august 1st!
So if I can get someone in there now I could possibly pocket an extra $2k before having to make a payment! I did this with none of my own money! Well actually I paid $1 as consideration to make the contract legal. So what do you guys think? Sweet deal or not?