Re: Option Consideration Clarification - Posted by JohnB_NJ
Posted by JohnB_NJ on June 01, 1999 at 15:47:14:
Yes, I misunderstood your post. I thought that you were trying to get an option on a home.
If you are trying to L/O a home you have under control (via a lease option w/ right to sublet) or a home you own, then yes, get as much upfront money as you can (the more the better). Ask the potential Tenant/buyer what they have to work with. If it is what you are looking for and they seem to be good canidates, then sign 'em up.
The option money is applied to the purchase price. But if the Tenant/Buyer defaults, that money is non-refundable. Make sure you spell that out for them. I have the Tenant/Buyer intial next that part of the contract.
BTW, I use two documents when selling on a L/O. A month to month lease and an Agreement to Purchase. My Agreement to Purchase states "if the lease is breached, blah blah blah, then the Agreement to Purchase is void and all Earnest money is forfeited. I also add on the Agreement to Purchase, "if tenant abandones the property, the Agreement to Purchase is void…
L/O are my second choice. My first choice is “getting the deed!”. I picked a home up yesterday for $100. The owner signed the deed over to me. Now, there was only about 5k in equity and the seller was going to let it go into foreclosure. I will L/O this home.
Good luck and good investing.