My First Lease Option Deal
I spoke with an agent yesterday about buying a townhome that is FMV $53,000 but owner will sell for $50,000. He is willing to lease with option to buy and wqants$2,500 down. but I want the terms to be set for 5 years to execute the option. Do you have any information that would help me. also I want to have paid this in for in 5 years without having to use a bak
Your post is a little confusing as to the terms you are requesting.
First, if you are requesting a five year lease option with a selling price of $50,000.00 and you are willing to pay the $2,500.00 as a lease option, then it seems that you should submit your offer that way to the agent. The homeowner is not involved in your securing of the balance of the funds plus closing costs. All the homeowner is concerned with is, at the time you exercise the option to buy, that the sale closes escrow and he receives his funds.
On the other hand, if your statement "I want to have this paid in five years without using a bank" indicates you wish the owner to carry the financing, then you should submit your offer to the agent that way. You could do this two ways:
1. Offer a purchase price of $50,000.00 with a downpayment of $2,500.00 and the balance carried by the owner as owner financing at a determined rate of interest amortized over five years.
2. Offer a purchase of $50,000.00 with a downpayment of $2,500.00 and the balance carried by the owner as owner financing at a determined rate of interest amortized over 30 years with a ballon due at the end of the five year term.
I could have interpreted your post incorrectly but it seems you are tring to intermingle a lease option with owner financing.
Dave
[addsig]
Ron, thanks for your advice. I know that I can get financed from a bank. But I did not want to increase my debt to incorme ratio. what I am trying to do is increase my income so that banks will see me income rather than my debt. so that is why I want to use the owner to finance the property on lease option. at the end of the 5 year lease option, I want to have paid this off totally in full to owner. do you think this is a good idea