RE investors input wanted.

One of my 2 rentals is currently vacant and I've finished up some small repairs and put out my trusty For Rent sign in the yard. So far I've had 3 people inquire about renting, 2 had dogs which I don't want and the other never got back to me after I said I require a full background, rental history and employment verification....

A few weeks back a nearby resident and Realtor sent me a hand written letter saying she wanted to buy the house for her son and could pay cash. I disregarded the letter because it seemed like an investor(she's a Realtor)trying to hawk a discounted investment property or she was fishing for listings.

The house is not a run down rental and other than perhaps updating the kitchen cabinets and maybe the vanity in the master it should bring market value(260-265) or very close. I've put about 35K into it in the last 3-4 years, A/C, roof, garage door, fence, and appliances are all 3 years or less old. It was completely painted inside and out 9 month's ago and I put down new laminate flooring everywhere but the kitchen and bathrooms. In the last 2 weeks I had both bathroom showers and tub completely refinished/recoated and new fixtures installed. The tile flooring in the kitchen and bathrooms was just color sealed and re grouted last week. It literally looks brand new...….even the baseboards have been replaced and or painted....you get the picture by now.

Yesterday I received an email to the address that I put on the rent sign(I don't like phone calls) and the same woman was wanting to know if I would be interested in selling her(her son)the house and holding a mortgage....I owe a little over 100K and since it's the nicer of my 2 residential rentals I had just planned on paying it off over the next few years and selling it when I retire. It's only 1305 sqft so I think it is somewhat limited as far as appreciation goes realistically, but it is also within walking distance to an A rated Elementary and HS.

Since she had mentioned having cash in her previous letter I'm assuming she could put down a large down payment. With Florida's forgiving foreclosure protection laws I would want 50% down and I would hold a private mortgage deed at 7% with either a 5 or 7 year balloon.

Having said all that I'm interested to see what some of you who are in the same position would do? Also if I held 50% of the selling price as a mortgage would I have to pay all of the capital gains on the selling price or just half?

 

If the story I'm getting is true about the house being for the son I'm assuming he isn't credit worthy or maybe hasn't established and Mom probably wants him out of her house....If so she may be willing to do a big downstroke and then let him build or rebuild his credit for a couple of years at which point he could refi the private mortgage. Something is just telling me deep inside not to let go of this house just yet...But the November thing is starting to loom large in my mind.

A lot to think about for sure....

 

Yup. I emailed my proposal to her earlier and I guess those little parts about "fair market value or close to it" and a 50% downstroke left her flopping like a fish out of water.....the 7% rate must have left her gasping for air..

 

Thanks Bushmaster. A lot of ways this could play and then throw in an election and some social/economic instability and it gets my head a little foggy thinking out all of the scenarios.
One side says sell now hold the money and wait for the market to come back down when you could buy a similar property for maybe 20-40% less.....or let it ride through possibly another down cycle while tenants are paying off the rest of the mortgage then either cash out or keep renting it for income...

BTW houses in the C.Florida area of this size and value rent for $1,500-S1800 monthly. What area are you in that brings 3K a month for a 1300 sqft home? Perhaps it would be worth me moving my house to your area..

 

I love the 1960's concrete block construction houses in our area because they are easy and inexpensive to renovate. I wish I could find them at your prices... In this area those 3 bd 1.5 bath1200 sqft houses are selling between $200-260k depending on location. My 2nd rental house is from that era and other than worrying about slab leaks it been good for the last few years and has a steady tenant. It's not a terrible neighborhood but $1250 is about tops you can get for rent there. I paid $180k and it went below 100k in value a couple years after but it's now in the 210-215k range and I'm at down to about 90k owed. Gonna hold on to that one as it rents really fast and is easy on the check book to repair and update.

 

I know what you mean about f @ckhead prospective tenants....why do people who don't own a home and have a hard time paying their bills feel the need to own dogs.....Nothing against dogs(I owned a German Shepard and Rottie) but I just don't want them in my rental houses because most people don't clean up after them(smell) and they tear the f vck out of the yard.

I get what you're saying about selling and the market being at it's peak but the flip side is even if the market drops someone else money is paying down the mortgage and increasing my net worth. In my case I've already replaced all of the expensive items like roof and A/C so there is little chance I'll be incurring any great expenses over the next 5 or 6 years. Make sense?

 

The Realtor is off somewhere flopping like a fish after I hit her with my proposal.....nothing but crickets

 

Thank God for that...we keep picking up more and more clients all the time due to the incompetence....a word to the wise when it comes to choosing a Title Agency, go for one who has been in business for over 30 years and has over 200 years combined experience within its 11 employees.....not some dumbass attorney who dresses his staff in the shortest shirts....

 

About 2 in 10 is realistic....since the closing agent does most of the work they have become more and more useless over the years....

 

BTW put the house on Zillow(for rent) Friday night and had it rented at 9:20am Saturday Morning....Aside from the 18 inquiries from the Zillow ad was another email from the same leech(Realtor) who wanted to buy the house again. This time she wanted to put 10K down and have me hold the mortgage at a "more reasonable' rate....Most of you guys know me well enough to imagine my reply.....