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Updated over 2 years ago on . Most recent reply

How to structure lease to own agreement
What is an appropriate lease to own structure regarding how much should be applied to principal balance? If our client only has 10% down, the bank requires 20%, and their monthly payment is $15,000, what amount of that should go towards reducing the sale price? $1,000? $2,000? Should the calculation also be based on Time Value of Money?
If anyone has a way to calculate this, then I would greatly appreciate the suggestion.
Most Popular Reply

None. They are to separate contracts:
1 - Lease
2 - Option to buy
When the option contract is executed, then the third contract is made:
3 - Purchase agreement
If you do it the old way where you give credits for rent, option consideration, etc..., then you're asking for trouble. Keep the contracts completely separate...and make no mention in either contract of the other contract.