Looking for some info. How would this be put together? A owner spoke with me about doing a lease option for her home that is currently being rented out. I do not have all the info. This is just in general and just trying to get some ideas. Home is in Joliet, ARV is est at 120k. Mortgage was around 80k. mortgage is 800.00 includes PITI. Interested in doing a lease option, the owner does not want to do the landlord thing anymore. Generally this would be a lease option deal, the owner wants asking price of 120k. The home has a current renter that has been there for few years. And does not want to move. Owner told me the renter would like to buy the home down the line, just not now. My question is.....How does one do a lease option and collect a option payment if the property already has a renter in place? Naturally I like to keep the renter in place but how would I fit in and turn that renter into my sublease tenant? Just wanting to know if this can actually be done. Thanks.
So, it totally can be done. When houses change hands they need to set up new leases with the tenants anyways so when you do that with the new tenant you can have them sign a lease option with you . the lease being normal and the separate agreement for the option having them put up X amount of dollars to you whether all at once or over a few months. On this type of house you should get at least 3k for an option fee. That option fee is so that they have the option to lock in their price now on the property. Have them lock in the price to buy for $125k or bargain your way down to 100k or 110k with the owner and then have the tenant sign an option for $120k. Any questions?
Well if you are doing a service for the seller - owner, and getting a fee, you are brokering. You would need a license.
So I would buy it first on land contract in IL and sell it on a lease and rofr or lease w option.
Here is an IL Lawyer's article re: ILCs
Thank you both. Brian and Joseph. My other question is, since the tenant is already in place and the owner is still willing to put me in the middle and allow me to sublease it to the tenant that is currently there, As much as I would like to get the option fee, but since the tenant is already there would you still have them put up a option fee? I'm guessing yes if they would like to purchase the property down the road. Curious to see how you guys would structure the deal if its even possible or would the current tenants have to leave. Thanks again.
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