Re: Help Please!!! - Posted by Rick(CA)
Posted by Rick(CA) on February 25, 2001 at 01:26:48:
Sorry to post a couple days later. It’s always a good idea to try and get your lease option for several years from the seller. And yes, you want to try and lock them into the original selling price. Matt B. posted a very good article on the How To section about lease option selling points.
The advantage is equity buildup. The second advantage is getting a buyer in there and paying you for a market price of the home you’re getting for $275. Then, you have them (buyer) sign a 1 year option. If they don’t exercise, NEXT! Get another option, maybe raise the price and start again. Making more money in the process, equity is growing, you’re using the option money as a cushion against mortgage payment if you can’t get a tenant in fast, etc.
If your buyer does exercise, then you made money from option consideration, extra on monthly payments, and difference in your selling price versus your buying price. win/win/win.
Just remember that when you sell on an option that you have two contracts. The option to lease and a separate rental agreement so you can evict them for non-performance. Otherwise, a good lawyer will demonstrate that they have an equitable ownership right in the house. (Disclaimer: I’m not a lawyer, but I play one on TV. j/k)