1st Lease Option Deal
hi ...
we found buyers for our house that want it lease optioned. its fmv tops out at 135,000 dollars. There is no mortgage left on it. Have a few questions, is 7500 bucks a good amount for option money. What document would i word in that it is nonrefundable option money? Is 1 year lease acceptable or should i demand at least a 2 year stay? Are there any specific clauses in the contract or any special loopholes i need to be concerned with? i appreciate the help
Hi:
In my opinion $7500 is a good
Option Money. If you do not have a
Clause in your mortgage about
Prepayment Penalty and you think
your return on sale is reasonable,
go ahead with the deal But let some
good REAL ESTATE ATTORNEY
take care of your closing papers.
sayana
Hi NikoLas,
The option consideration seems like a fair amount. Make sure that you get it in the form of Cashiers Check or Money Order.
You could put the non-refundable clause in your Option (amendment) or agreement, which should be seperate from the lease.
A good exit period on the L/O would be that the tenant can excersize their option between the 12th and 24th month. You could alos lay an extension clause in there that states that if they do not excersize the option during that time that you will give them another 12 month extension if they will provide you with an additional amount of $1,000.
Chances are that it will be easier for the tenant to fund out the option rather than scraping up another $1000 bucks.
Best of Success!
BAMZ
I personally believe that you can get more down, esp. if the FMV is $135K. You can possibly get upwards to $10K or more. Find out how much down can your buyer afford to put down. Let them mention a number 1st. You can then decide to counter or not. Good Luck! Eric
Take the $$$ and run!!!
After speaking with the tenant/buyer, how quickly do they plan to purchase? Be realistic and not greedy. Hopefully, your monthly rental amount is within the average area rent. Within the L/O technique there are 3 payment windows (down payment, monthly cash flow, and final sales price)
A one year L/O is acceptable, and all payments are usually non-refundable. Maybe since the property is free and clear (no mortgages) you will consider being the bank (owner financing) if the payments during the lease period have been paid on time. (Banks learned that lending money is profitable when structured properly)
Eric & Rosa
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