I have a family interested in doing a lease to purchase on my house. I want to create a contract that is both fair to my tenants and advantageous to myself, and also meets the legal requirements for such contracts in North Carolina.
What are some points for deciding such things as how much for the security deposit, amount put in escrow above standard rent, amount recommended for option-to-buy money down, etc etc?
Also, what are laws and regulations I should be aware of in NC for a lease to purchase?
Thanks for any guidance! :)
@Joshua B Here's some info about what contract needs and guidelines.
Personally I don't know too much in depth, because I have not had a lease w/ option under my belt. From what I've read and advice I have gotten is really it depends on you and how you determine how serious the buyers are. Typically the money down is lower than 10% (maybe 5-7) and you would establish an interest rate (7-8%) and the life of the contract 5-10 years or even sooner. If it were me I would get enough down to cover their default and any damages, establish an interest rate (double your rate if you have a mortgage) so you have a cash flow coming in and keep the loan length at about 5-7 years.
Again I don't know a whole lot about it but I hope this helps a little bit.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.