lease purchase option money - Posted by john shine

Real Estate Investing Real Estate Law
#1

Posted by john on June 06, 2007 at 13:54:39:

thanks rich and i do see youre point on both sides. i just think tieing up funds for a 6 -12 month period is not productive. probably use upfront then put back in escrow a month or so before the option runs out. appreciate youre input

#2

lease purchase option money - Posted by john shine

Posted by john shine on June 05, 2007 at 08:34:18:

Hi,
I am currently working on a lease purchase sale.I am owner question: can the lease purchase option money be used by seller(me) upfront or does it need to stay in an escrow account until the option is exercise or defaulted on. It is my understanding the option funs are forfieted anyway upon signed agreement.first lease purchase sale for me any info helpful. florida.thanks in advance. john

#3

Re: lease purchase option money - Posted by Rich-CA

Posted by Rich-CA on June 05, 2007 at 23:18:33:

Personally, I would put the money in escrow just in case litigation rears its ugly head. Better to be seen as honest and above board in handling the funds than as someone out to grab as much cash as quickly as possible.

#4

Re: lease purchase option money - Posted by john

Posted by john on June 06, 2007 at 04:38:41:

is it an option thou to use the funds right away for another investment or is it required to stay in escrow until default or option exercised

#5

Re: lease purchase option money - Posted by Rich-CA

Posted by Rich-CA on June 06, 2007 at 09:12:04:

I don’t think its require you keep any of the funds in escrow. After all, you sold them the option to buy. If its like the ones used in the stock market, then what you sell them is the option to buy at a specific price withing a specific period of time. So the money is yours.

I only explained what I would do because if you ever did get sued, being able to show careful handling of the money makes a lot of difference.

#6

Re: lease purchase option money - Posted by john

Posted by john on June 06, 2007 at 04:46:06:

or how about a small portion of the funds used upfront and rest going to escrow. ex. $8500 option money. use $3500 upfront and put $5000 in escrow