Lease Option question

5 Replies

Lease option includes what typically?  Does the buyer pay insurance, taxes, maintenance, everything over $500 in expense etc.  If there is a basic me mentor we are willing to pay for private lessons. 

@Account Closed , How we do ours is we have the renter fill out the paperwork as a normal lease, which includes everything a basic tenant would pay for that property (i.e. utilities, and any associated maintenance, first month rent, security deposit, etc.) if they were renting from us. Then we have them fill out the option to buy paperwork with a 3.5% deposit (FHA loan) of the sale price of the property. We also charge an extra amount that we give back to them for closing cost if they're able to close at the agreed upon date. We typically ask for 3 years. I know other's break it down differently, but if you want more specific stuff feel free to PM me. I will help where I can, and there's no need for payment. I hope this helps and good luck!


@Account Closed , I am an investor as well, and that was from an investor's angle. I'm not sure I follow you when you say from an investors angle. An example would be, I buy a house at 50k, I put 20k into it. The ARV is 100k. I rent it out for $1400 a month (plus $1400 security deposit). I than have tenant give me 3.5% down ($3,500) as an option to buy at my ARV. I also charge them $100 extra a month that I put toward closing cost for them (if they go to closing). They pay me $1,500 a month. In my lease I have them pay all utilities, do their own maintenance (i.e. snow removal, lawn care, etc.), and tell them to take care of the property as if it were theirs. The lease option is 3 years in which they have to close on the property, not before or after. I pay taxes, insurance, and anything associated with the property that would fall into capital expenditures. It's still my property!!!! At the end of the 3 years, if they go to closing, I give them $7,100 back for down payment and closing cost. 3.5% FHA loan (3,500) plus 100 bucks a month set aside ($3,600) equals $7,100. If they're unable to close, I keep the $7,100 and we either renegotiate or they leave and I find new tenant. Now, please help me understand what you mean from your stand point as an investor?

To alleviate confusion as well, and make sure we're talking about the same lease option...

"A lease option (more formally Lease With the Option to Purchase) is a type of contract used in both residential and commercial real estate. In a lease-option, a property owner and tenant agree that, at the end of a specified rental period for a given property, the renter has the option of purchasing the property." (wiki gave me this little gem, mostly because it was the first thing that popped up when you google it.)

@Account Closed , I don't buy properties with a lease option, I sell them. I wouldn't allow someone else to do a sub-lease either from one of my properties, and I think that is what you're getting at. You may need to be more specific when you write your question. Like doing a sub-lease to rent it out to someone else to buy it later. Let me know if this is what you were trying to get at. Thanks


master lease agreement, to purchase a 32 unit apartment building for example.  Its owned free and clear and seller is interested in lease option