The $300,000 house we kept
In July we looked at selling a house in Mentor for about $300,000. We kept it instead, and the family living in it signed a new option to buy it.
We bought the house in October 2022 for $254,000, taking over the seller's mortgage. A family moved in on a lease option that same fall. Their first option ran out in March without a closing, and they stayed and kept paying month to month.
That is the point where a lot of owners list the house. A sale would have paid off the mortgage we took over and put the rest on the balance sheet as one lump. It would also have ended the rent.
The family wanted to stay. In July they signed a new option with a $315,000 purchase price written in. They pay $1,800 a month in rent plus $500 a month that counts toward the purchase, and $15,000 from the first option is already credited to them. If they make every payment, about $21,500 comes off the price when they close, which has to happen by the end of May 2027.
So $2,300 arrives every month, part of it still paying the mortgage underneath, and the family that wants to buy the house is already living in it. If they close by that deadline, the mortgage is paid off, we get paid out, and the rent ends. I'd rather own those months of payments than a lump sum I have to reinvest.
Wealth is a number you get once. Income is a payment that keeps showing up.
Here is my question for you. If it were your house, would you have taken the lump sum in July, or kept the monthly payment with a buyer in place? Hit reply and tell me which, and why.
As promised, income over wealth in under a minute.
- Dan
We bought the house in October 2022 for $254,000, taking over the seller's mortgage. A family moved in on a lease option that same fall. Their first option ran out in March without a closing, and they stayed and kept paying month to month.
That is the point where a lot of owners list the house. A sale would have paid off the mortgage we took over and put the rest on the balance sheet as one lump. It would also have ended the rent.
The family wanted to stay. In July they signed a new option with a $315,000 purchase price written in. They pay $1,800 a month in rent plus $500 a month that counts toward the purchase, and $15,000 from the first option is already credited to them. If they make every payment, about $21,500 comes off the price when they close, which has to happen by the end of May 2027.
So $2,300 arrives every month, part of it still paying the mortgage underneath, and the family that wants to buy the house is already living in it. If they close by that deadline, the mortgage is paid off, we get paid out, and the rent ends. I'd rather own those months of payments than a lump sum I have to reinvest.
Wealth is a number you get once. Income is a payment that keeps showing up.
Here is my question for you. If it were your house, would you have taken the lump sum in July, or kept the monthly payment with a buyer in place? Hit reply and tell me which, and why.
As promised, income over wealth in under a minute.
- Dan