Posted by John Little on August 10, 2011 at 16:38:44:
There you go again, Anthony. FYI, he didn’t use an “illegal trust
scheme” but a standard Lease Option. Your agenda is painfully obvious
and makes you look really dumb. You need to read what he said.
There is a wealth of information contained therein and from your posts
it is obvious that you need the education.
l/o and lease purchace whats the differance - Posted by Paul
Posted by Paul on August 09, 2011 at 20:24:20:
what is the difference between a lease
option and lease purchase
Re: l/o and lease purchace whats the differance - Posted by David Krulac
Posted by David Krulac on August 10, 2011 at 07:12:57:
Some people say that an l/p is more binding in that the buyer agrees to purchase the property, whereas the l/o only binds the buyer to the “option” of buying the property. I have heard some say that they would only do l/p because it locks in the buyer.
However, IMHO, if the buyer wants to walk it doesn’t make any difference whether it was an l/p or l/o. Theoritically you could sue the defaulting buyer in an l/p, but not in an l/o, however many buyers have nothing worth sueing over.
Re: l/o and lease purchace whats the differance - Posted by WAREIA
Posted by WAREIA on August 10, 2011 at 12:23:28:
A Lease Purchase is the Obligation, not the Option and a Lease Option is the Option, not the Obligation.
Most Gurus teach you to do a LP with the Seller and a LO with the Tenant/Buyer.
Since a LP is an Obligation, it is a “Sale” and would require the Seller to have to Foreclose on you to get their property back. The idea is that if you do a LO with the T/B, and they default, you can evict them and locate a new T/B before the Seller has time to foreclose and use the new T/Ber’s funds to bring the loan current.
However, if your T/B in the LO knew the truth, they would know that the IRS considers an LO a “Delayed or Disguised SALE” and also may require a foreclosure as opposed to a simple eviction. Classifying the transaction as “A Sale”, now gives the TB a possible claim of equity in the property.
I very rarely see LO TBs foreclosed on because they simply don’t understand they may have an equitable claim of interest in the property. I found out the hard way because it happened to me. My TB, when fighting their eviction, mentioned to the judge that they had put up $10k in a Non-Refundable Option Deposit, had agreed on a Purchase Price, Were given Rent Credits, etc and were claiming the possibility of equity in the property. Without another word the judge said he could no longer hear the case because it belonged in another court and that I may have to foreclose.
The TB lived in the place for another 8 months paying nothing until we finally agreed to settle. In the meantime, the original seller’s lender foreclosed on him and he sued me for specific performance of my Lease Purchase Agreement.
In case you are wondering, in addition to using my own attorney, the documents and legal advise I received for this and over 60 other LP/LOs came from the material I purchased of Gurus who frequent this site.
The answer to your question is, there is a difference in definition, but not by the Federal Government or the State of Arizona, Utah, California, Oregon, Washington, Florida, Texas, etc. They all consider an LO “A Sale”, period! Just don’t let your TB know it.
Re: l/o and lease purchace whats the differance - Posted by Johnny D.
Posted by Johnny D. on August 20, 2011 at 06:18:34:
Why did the original sellers lender foreclose? Did you
stop making payments on the mortgage when your tenant
buyer wasn’t paying you?
Were you in a cash crunch and couldn’t make the
payments on a vacant unit?
Re: l/o and lease purchace whats the differance - Posted by Anthony
Posted by Anthony on August 10, 2011 at 14:14:20:
Just because you were bumped out of landlord/tenant court doesn’t mean the equitable title claim would have stuck in the higher court … one of your T/B’s, as part of your illegal trust scheme, could have made the exact same claim with the exact same results.