I was looking for a second set of eyes in a deal that I am working on.
The property is a 1150 sqft bungalow (3 bed+2 bath), with a extra large double car garage. The house is move in ready with nice decor and colours. Property is located within in Kenilworth, here in Edmonton. We are purchasing the house for the debt which is $358K. The based on recent comparables the house is worth $355 to $360. We are looking to purchase this property under an agreement for sale. With a term of two years to match the current financing.
The rent in the area for similar properties is about $1600 to $1700. The current mortgage + insurance+ property taxes+ vacancy + maintenance is $1660.
We are looking at two exit options
- Lease Option the property, with a 1 year term, with the a possible extension of an additional 6months.
I would like have a second option or thoughs on this deal. I am little concerned that I only have two year term (the sellers are pretty fixed on not extending this term) , which does not give me a lot of time to get a tenant buyer in place and get them qualified for there own mortgage.
The property is a 1150 sqft bungalow (3 bed+2 bath), with a extra large double car garage. The house is move in ready with nice decor and colours. Property is located within in Kenilworth, here in Edmonton. We are purchasing the house for the debt which is $358K. The based on recent comparables the house is worth $355 to $360. We are looking to purchase this property under an agreement for sale. With a term of two years to match the current financing.
The rent in the area for similar properties is about $1600 to $1700. The current mortgage + insurance+ property taxes+ vacancy + maintenance is $1660.
We are looking at two exit options
- Lease Option the property, with a 1 year term, with the a possible extension of an additional 6months.
- Rent + Options payment - $1,800-$1,900
- Lease Purchase Price ` within 1 year $380,000
Lease Option Down Payment - $ 15,000 min
- Rent property out for one year
This would likely be a break even cash flow for the first year if not slightly negative, with positive cash flow in the second year. Our objective would be to sell in 1.5 to 2 years for the $380,00 range depending on market conditions.
I would like have a second option or thoughs on this deal. I am little concerned that I only have two year term (the sellers are pretty fixed on not extending this term) , which does not give me a lot of time to get a tenant buyer in place and get them qualified for there own mortgage.