Land Contract/Lease options Terms

2 Replies

Hi All,

I am considering doing a Land Contract or Lease option on one of the properties I own. My understanding is that with these methodology, the owner (or the seller) retains the title until specific conditions are met, so the seller gets to claim all deductions and expenses until the title is transferred. In regards to lease options, there are things that you need to be careful about so that IRS doesn't view the transaction as immediate sales, but otherwise the seller gets to keep the title until the option is exercised.  My questions are about the terms of these transactions.  PLEASE ONLY REPLY IF YOU HAVE DONE THESE TRANSACTIONS IN THE PAST, as I don't want to get confused between facts and opinions...

Please indicate whether you are commenting about Land Contract or Lease options first:

1. How much do you mark up the sales price from the current market value, if any?

2. What upfront down payment or option payment do you charge?

3. For LC, what interest rates/terms do you give to the buyer?

4. For both, what are terms/clause you put into the contract that I should definitely consider?

5. What are your success rates in the transactions actually going through?

Thank you for your help in advance.