Lease To Own Agreements
I've got a 2-flat under contract that I'm considering doing a lease to own for. Does anyone know of a simple contract that they can refer me to? Also, I'm looking for advice on how to structure the deal. Is there a standard for what percentage of rent you offer as a downpayment? How do you calculate the buyout price? Is it current market value muliplied by area appreciation over the term of the lease?
Any suggestions would be greatly appreciated.
jeffbrandt,
Welcome to TCI; I was about to try to help you with your question about "flat" ( Are you from New Zeeland or GB?) but I see that Lori did that already "in great detail" (that's her post collecting stile) already. Since this site is about people starting and advancing their knowledge in RE and respectfully need help, it is our duty to make sure that members pretending to know enough to speak at list try to be truly informative, instead of "accumulating the number of post".
What state are you in Jeff?
PS
Lori,
Would you be so kind to let us know where can we get the book you suggested in your post above? I do not mean to be rude but you been posting a lot of incorrect information on this site in order to get the higher number of posts. Where do you think you are going with that? [ Edited by omega1 on Date 02/12/2004 ]
Use a standard offer to purchase and contract and seperate Option agreement that is recorded to protect the tenants interest in property. NO security deposit in the lease. I do this so if I evict tenant then Judge or magistrate understands the lease and everyone recognizes they are two seperate documents/agreements.
Refer to attached documents on both documents. e.g. Please see attached option agreement. This rental agreement is part of a lease with an option agreement.
Judges like easy to read, straight forward leases with notice given.
Find these docs at any office supply store or become buddies w/a local Realtor. Again, judges like bar association and/or realtor forms.
barcor
Barcor,
I'm not quite sure I'm following you. Are you saying that you have 2 documents - 1 that serves as the lease and the other that serves as the option to purchase?
Also, are there any standards by which you determine the purchase price and percentage of rent that's credited toward the downpayment.
To answer the earlier post - I live in Chicago. What's the problem with using the word "2-flat." That's what they're called in this city.
That is correct Jeff. Two seperate document.s A standard lease and a option that has an attached offer to purchase as reference only. The offer outlines prices, closing costs paid, etc. You can even add an addendum/attachment A to the documents for additional provisions. e.g. Collecting additional option money @ a later date or if you require the tenant to pay property tax, so on and so on
I have several investor buddies who have an attorney drafted lease option agrrements. The ALL in one agreement. The problem that could aricse would be if document conflicted w/tenant -landlord law. Don't know laws in IL but this works for NC and SC.
One way around the tenant landlord law is doing a land contract (seller financing). I like them a LOT more!! No maintenance, repairs or late calls because a dishwasher is broken.
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