Posted by Bill K. - FL on January 24, 2000 at 21:56:03:
The L/O is good when you have an outstanding loan you can’t assume. You can offer to make the payments for the seller and structure the L/O to payoff the entire loan and then buy the home for $1. Also put in if you exercise your option before the final payoff the price will be the loan balance. You can sell with L/O with higher payments than you are making for a little longer term and once the loan is paid you can have the buyer exercise his option for a certain amt and finance Lonnie Style for the remainder of the purchase price. In other words when you sell you can mirror a Lonnie style financing deal but as a lease opt instead. The option price is reduced depending on how many payments have been made. No sales tax is paid by the buyer until they exercise the option. Therefore they need less $ up front.