Special Deal: Buy, Hold for 3 Years and sell – 1 tenant (lease to buy option)

$ 350,000
Favorite
Your search results
Transport
Supermarkets
Schools
Restaurants
Pharmacies
Hospitals

Overview

  • Updated On:
  • November 14, 2021
  • 3 Bedrooms
  • 3.5 Bathrooms
  • Year Built: 1976

Property Description

This is a unique situation

We have a lease-to-buy person who needs 3 years to be ready to buy the house back from you, the investor-owner.

The person who wants to buy the house in 3 years is a family member of our local agent.
Correction: This is not our agent family member. It’s a family member of the person who brought the deal to our agent. 

 

The plan is

  • You buy this house (asking is 390k but we believe it can be bought for $350k)
  • A tenant would pay $10,000 in option fee
    • Lease option fees are typically non-refundable if they don’t exercise the option the owner would have the prerogative to extend it or not
  • Rent it for $2500/mo for 3 years
  • Buy the house back for $50,000 more ($400,000)
  • The tenant would take care of maintenance

 

Benefits/Who Should Consider it

  • An investor who is looking for a “shorter” term position – ie sell w/in 3 years 
  • This type of lease-to-buy reduces the chances of tenant turnover, a property manager may not be required, no leasing fee – this is an opportunity to have a less “noise” 
  • We are exploring w/ the lease-tenant about payment of the HOA fee – this means it is likely the owner will have an additional $342/mo in cashflow!!

 

The House

  • A similar (250 sq ft smaller) house in the community is listed for $430k (on the market for ~35 days)
  • It is 2 bedrooms + a loft on a cul-de-sac surrounded by trees and beautiful landscaping
  • The finished lower level has a rec area, office, full bathroom, storage, and laundry room.
  • HOA amenities include a pond with fountain, clubhouse, tennis court & pool.
  • HOA includes landscaping, including gutter cleaning and more

 

Guarantees

  • Like any other lease or investment, there is always the chance the tenant won’t exercise the option

 

What’s next?

 
Email/text for address, analysis and to get connected to Simply Do It’s local team that handles this transaction.

 

Analysis 

 Bedrooms 2
 Bathrooms 3.5
 Square Feet 2613
 Year Built 1976
 Garage Size 2

 

Purchase Assumptions 

 Market Value $350,000
 Improvements (lower) $7,500
 Improvements (upper) $9,500
 Closing Costs $3,500
 Mortgage Costs $3,500
 Other Fees At Closing -$10,000

 

Financing Assumptions

 Down Payment (%) 25%
 Down Payment Amount $87,500
 Financed Amount $262,500
 Interest Rate 3.50%
 Mortgage Term (Years) 30
 Monthly Mortgage Payment $1,179
 Cash Outlay (Total Out of Pocket) $93,000

 

 

Financial Assumptions

Monthly Yearly
$2,500 $30,000
Rent (lower) $2,500 $30,000
 Property Tax Rate (Approx.) 1.42%
 Property Taxes $465 $5,580
 Insurance $100 $1,200
 Repairs $50 $600
Variable-Cost PM 0.0%
Property Management Fee $0 $0
 Leasing Fee $0.0 $0
 HOA** $342 $4,104
 Vacancy Rate 0.0%
 Total Fixed Expenses $957 $11,484
 Total Expenses (Fixed + Mortgage) $2,136 $25,629

** we are exploring w/ the lease-tenant about payment of the HOA fee – this means it is likely the owner will have an additional $342/mo in cashflow!!

 

Financial Analysis / Deal Attractiveness

Years: 5 10
 Cap Rate 5.5% 6.6%
 Net Cash Flow $25,633 $61,296
 Equity Increase $102,874 $227,340
 Total Gain $128,507 $288,636
 Average Cash Flow/Year $5,127 $6,130
 Average Cash Flow/Month $427 $511
 Average Gain/Year $25,701 $28,864
 Average ROI 138.2% 310.4%
 Annual ROI 27.6% 31.0%
 Projected Property Value $425,829 $518,085

 

 

Disclaimer

Information contained herein was obtained from sources deemed reliable, however, Simply Do It and/or the owner(s) of the property make no guarantees, warranties or representation as to the completeness or accuracy thereof. The presentation of the property is offered subject to errors, omissions, changes in price and/or terms, prior sale or lease or removal from the market for any reason without notice.

The analysis is provided “As Is”. All the information is believed to be accurate (except for the small effects of some simplifying assumptions), but is not guaranteed, and depends on the values entered for the property. This analysis is intended for the purpose of illustrative projections. The information provided is not intended to replace or substitute for any legal, accounting, investment, real estate, tax, or other professional advice, consultation, or service. Simply Do It and/or the owner(s) are not responsible nor liable for any damages arising from the use of the analysis info. c

Area:
State/County:
Zip: 63017
Country: United States
Open In Google Maps
Property Id : 39956
Price: $ 350,000
Property Lot Size: 4,400.00 ft2
Bedrooms: 3
Bathrooms: 3.5
Year Built: 1976
Garage: Garage
Garage Size: 2
Basement: Finished
External Construction: Brick Veneer, Vinyl Siding
Rent (mo): 2500
ROI (ann): 22
Cashflow (mo): 410
Property Taxes (mo): 5500
Insurance (mo): 100
Repairs (mo): 0
Management Fee (mo): 0
Leasing Fee (ann): 0
HOA (mo): 340
Vacancy Rate (ann): 0
Other Features
deck
fireplace
front yard
recreation
storage
walkscore0 / Car-Dependent more details here

Other Agents

Similar Listings

Package
New Opportunity

Mixed Use 8 Units 2021 Build Building in Kan...

2021 built Mixed use building with 5 residential units on the top and 3 commercial units o [more]
2021 built Mixed use building with 5 residential units on the top and 3 commercial units on the lower level. Centra [more]
22
Package
Rented
SOLD

Buy & (almost) Forget – NNN Condo...

$ 234,500 Asking
See discussion and additional Q&A in the comments section below MUST-READ The suggeste [more]
See discussion and additional Q&A in the comments section below MUST-READ The suggested Simply Do It (SDI) offe [more]

Compare Listings