lease option question

Hi Suzyb

There's a couple ways of doing it. 1. once you have a tenant buyer you have the home owner sign another release of information for the tenant buyer and it's up to the tenant buyer check on it every couple of months or every month.
2.there are service companies not sure what they're called that your tenant buyer sends the a rent check to (usually a small service charge) they pay the mortgage, usually includes taxes and insurance and send the balance to the homeowner. This is by far the best way to protect your tenant buyer.

to go a little farther to protect my tenant buyer. I always file a MEMORANDUM OF OPTION you filed this at the County courthouse just clouds the title, which means the homeowner cannot open up a line of credit, sell the house, get a second mortgage this is something I always do. if you need a copy of my MEMORANDUM OF OPTION just p.m. me and I will gladly e-mail to you Or anybody else for that matter. Anybody else has any other input on this matter. I be glad to hear about.

Reuben

Hi Alton,

To answer the first question is the tenant buyer can purchase the home at any time during the option period. first, let me get one thing straight the option fee is how we as investors, and doing lease options make money, got it.it's nonrefundable says in writing the contract or it should say so.
Second thing I always applied, the option fee as a down payment how we do this here's an example, let's say the seller is selling the house for $100,000. and my option fee is $5000 I find a tenant buyer would sign a lease option contract for $105,000in this example, the seller gets his $100,000 investor gets the $5,000 option fee and when the tenant buyer goes for a mortgage, the bank will see this is a down payment, also very important. I am always up front with the seller about my option fee that I get to keep it. Everything is clear and everybody knows what it's about. I hope this helps

Reuben

I just recently met with this Realtor and maybe possible getting the property on contract. She has to get back with the owner to confirm a lease option request. The question is;on our next visit, do I have to have my down payment right then, or can I get a request small period such as 10 to 14days?

Everything is negotiable.

Karen

Good stuff, had to bump it.

AS I've read through the various posts, I've seen concerns represented, and some solutions offered, so kudos to those who have been providing great information. After completing numerous L/P transactions, either as the buyer, the seller, or both (in a sandwich lease option) I'd like to share a few helpful tips to protect yourself financially in your relationship with a tenant buyer.
Let's face it, if they are coming to you for a lease purchase there is a very high probability that they have credit problems, and while I do credit checks, I simply know that I'm probably going to have to allow some credit challenged people into my properties. Here are four ways I've found to protect myself financially in setting up these arrangements:
1) COLLECT LOTS OF CASH UP FRONT--A tenant expects to pay a month's rent and a deposit, someone who wants to buy a property in the future needs to be prepared to pay quite a lot more, and if you do the same things as landlords do with their renters, expect your tenant/buyers to behave like renters. My standard Option Consideration on a property is around 3 to 5% of the selling price.
2) MAKE THEM RESPONSIBLE FOR REPAIRS AND MAINTENANCE--They aren't coming into the property to be a renter, they have aspirations of ownership, let them act like owners in training. See point 3 for how to make that work well.
3) OBTAIN A HOMEOWNERS WARRANTEE--I offer to go in 50/50 on a homeowner's warrantee with my tenant/buyers. For a few hundred dollars you get almost everything covered, and instead of it costing thousands to replace a furnace that goes out, it costs $50 to $100 deductible, and the house feels upgraded to them. Even if my tenant buyers do not bite on the split price, I will purchase the warrantee myself.
4) CREATE AN EMERGENCY FUND--Tenant buyers may be well-intentioned, but frequently they don't follow the plan. If you have to solve a problem that they created, and it is difficult or impossible to collect from them, it's nice to have deposited away in a separate bank account approximately 3 months worth of payments from the option consideration they paid up front. You may struggle to set aside that money, but I call mine my sleep easy fund.
Success with Lease Purchase comes from thinking through problems that can happen in the future and solving them before they do.