Updated almost 7 years ago on . Most recent reply
Pre-Existing Option Contract On Rental
How does it work when you buy an investment property where the previous owner had an option to sell contract with the current tenant? Will the consideration payment be paid forward to me and then I am short an option contract with the current tenant? Does the seller buy back the option from the current tenant for a premium? It's hard to wrap my brain around. Thanks!
Most Popular Reply
I would want to find out the details of the option contract. That would be very important.
If the seller has an option to sell at 100k and you are offering 80k, I would do the deal. If you buy at 80k and the tenant exercises his option, great you are in the money.
If the opposite is true, you are about to get screwed.
I think if the seller is not being up front, talk with the title company immediately to get your earnest money back. That is called fraud. And yes, it sounds like the seller is trying to sell the property to you even though he just promised it to someone else.