Selling via Lease Purchase in Oklahoma

8 Replies

I'm generally familiar with the lease purchase vs lease options and generally familiar with the risks.  I've seen a myriad of forms which are generally the same.  Where I need some advice or opinions are on the following:

Guidance on terms structure, dn pmt, monthly payment, length of initial term, owner carry at expiration or buyer financing, etc

IF Owner carry is an option at expiration, what has to be done to complete a wrap?

Specific Worst Case Scenarios

The house a mortgage balance of $63K, sell price is listed for $78K, current rental rate about $850, 3br, 1 ba, 1400SF

Any advice is appreciated.

Lease for 900 a month, set the exercise price for 82,000, 12 month lease, discount of $50 if it's paid by the first of the month,  tenant can extend the lease for another 12 months if paid on time

Create a lease, an option and a sale and purchase agreement, create a letter of intent to lease purchase

Charge 3 % non refundable option

Make sure the tenant buyer that moves in has a good chance to get the mortgage by having their 1003 app looked  at  by a mortgage broker

@Brandon Siewert

Ok thank you. What I'm looking at is a lease purchase not a an option.  They want to make a down pmt with a purchase in 24 months by their own mtg or an owner carry via a wrap. Make sense?

Brandon, Please clarify your interpretation of the difference between a lease purchase and lease option. I've always used them synonymously. I do a ton of these and would love to chime in. I'm here in OKC. Let me know what you mean. Brian

lease option = at the end of 24 months they could purchase lease purchase = at the end of 24!months they Will purchase. they have a $20k dn pmt. 

Gotcha. Don't think it matters either way. At the end of 24 months, if they can't perform, you get the property back either way (and the $20K). Whether you call it option consideration or a down payment, it's really the same. Many gurus teach to have a separate lease agreement and option agreement  and call the down payment " option consideration", but I can tell you from experience that if the tenant buyer wants to fight you in court, the perceived benefits of structuring it this way are out the window. I am not an attorney, just an investor that has experienced this first hand.  

Brian

thank you very much for the advice and I agree there's basically no difference in the bottom line.

Would a contract for deed be a better option?  I'm not very familiar with those

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