No. Why do you say there is no third party buyer? All you are doing here is skipping yourself in the chain, there is still an option to buy. If that option is recorded and the lender discovers it, they may,at their
discretion, call the loan. You do not have to reinvent the wheel here, the wheel that is used here works just fine. Leases of less than three years, do not record the option, fully disclose everything to tenent/buyer. Change or drop any part of this at your own risk.
Lease options: would this technique work? - Posted by Bryan in Cali
Posted by Bryan in Cali on February 10, 2002 at 21:15:09:
I was thinking about how to aviod the due on sale clause with a lease option, and I came up with this: Have the seller lease to you and then you sublease to a buyer, but have the option to buy be only between the current owner and the prospective buyer. Since there is no third party buyer, this looks like just a sale of a home to a tenant without the pitfalls involved in a flip. Your profit comes from the difference in rents.