Tenants want to own, but....

[Benjamin Z. Pickens]

Currently, I have 1 rental property that has a mortgage. The tenants are eager to own the property as there are upgrades they would like to do. I am working with them on a lease option. The catch is they seem to refuse to get a loan. They have great income and no issues paying rent. They have newer vehicles which is indicative of good credit. At this point I believe it's going to come down to forcing them to get the loan or move out during the lease period. 

I just wanted to see if anyone else has dealt with this and if so how did you handle it? 

[Shiloh Lundahl]

Thanks @JD Martin for the shout out and your kind words. Truthfully there are many on BiggerPockets much more experienced and knowledgeable at lease options than me, @Brian Gibbons and @Joe Villeneuve to name a few. But I appreciate your words.

I agree with @Erik W. that they will eventually either need to get. Loan from a bank, a private lender, or do seller financing with you. If they refuse to ever get a mortgage and cannot pay large chunks of money, then a lease option wouldn’t work. I have a subcontractor who has a lease option on one of my properties but he is going to by it cash rather than get a loan. The house is worth 250k and he only owes about 70k left. So if he is able to do that, than I think that would be fine.

What are the numbers? What is the current value of the home? What is your mortgage payment and interest rate? What’s left on the mortgage? What are your taxes and insurance monthly costs? Those numbers are important to see if it would be worth doing seller financing or not.