[USER]

Hello!! I am young & currently rent. A townhouse went for sale on my street for sale by owner. Wanting to purchase and use owner occupied.

There are 3 units I’d live in one. Listed at 255. Going to offer 235.

The current owner wants to allow the two tenants to sign a 3 year lease only allowing me to raise the rent 10% a year over the next 3 years.

They currently pay under market value at 680 per month. I’d save 900 per month that I currently pay in rent.

After the 680×2 I’d be paying 387 on the mortgage payment. (My rent)

Depending on what I decide to put down my mortgage payment will likely be around 1747 per month.

Does this seem like a good investment?

[Nicole]

He could sign the lease anyways. I would factor in the loss of revenue and offer less to the owners.

[Luciano]

See if he is willing to take that on by offering him $15000 less for the purchase?

Tell him you are ok with the a 3 year lease with a 10% increase year after year as long as he is willing to sell for $15k less.

See how strongly he feels about that.

[Ana]

Under market value already and 3 year commitment doesn’t sound like a practice I would accept in New Mexico. Is this a rule/mandate or rent protection dictated by the state laws?

I understand your “cut” of the monthly payment will be less but you have to account for maintenance and extra money to be able to keep the place running.

I also understand this is sale by owner, but you may benefit from having a real state professional who could guide you on the rules etc and how much leverage you could have.

[Christine]

Are you using a real-estate attorney to consult on rent laws and to close? Are you doing inspections – have you seen inside the other units?

How much under market is the current rent?

[Author]

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