Lease Option Deal, need advise. PLEASE HELP.

There is only $20k in unaccounted equity. One way would be to give them $20,000 down and do a wrap, also known as an All Inclusive Trust Deed for $110,000. For starters, $110,000 6% for 30 years is $659/month. If you figure expenses at 40%, that leaves you $990 for debt service, so it should cash flow about $330/month for starters. You can get creative from there. Or you could offer a stepped interest note of 3% for 3 years, then the interest increases 1% per year, and caps at 6% after year 6. So for the first 3 years, you could cash flow another couple of hundred a month to build up some reserves and do some maintenance on the property. Or you could give them $20,000 down, take over payments on their loan and see if they would carry a second for their other $20,000 with payments of $500/month until the balance of the second is paid. Lots of ways to go. But the simple wrap shows there is a deal there. How creative you get with the terms will determine how good a deal it will be. Not a lease option as mentioned in your headline, but you could go the master lease route as well. The only problem with that is you will have to arrange some sort of financing to eventually cash out the seller, and who knows what the loan environment or interest rates will be in 3-5 years.

I really appreciate you taking the time to help me look at this deal creatively, now I gotta get in my offer.

Thanks again!
Thom