Cashing out a lease-option...

[Rick Shepard]

We have a free & clear house in Huntington West Virginia that we have sold using a lease option. We sold the house for $17,500 and get $500 per month at 11% interest. The buyer is employed and has made 6 regular payments, 2 of which were even a little early.

We would like to cash this property out. Any suggestions?

Thanks in advance.

[Jon Holdman]

Not sure I understand what you've done. You say its a lease/option, but you say you're getting payments based on 11% interest. That sounds more like owner financing than a lease option.

If its a lease/option, I don't think there's anyway to cash out. If it were just a lease, you could sell it to someone else who would then take over the lease. But since the tenant/buyer has an option, you can't sell.

OTOH, with a lease/option, you would just have rent, possible with a rent credit. An interest rate wouldn't apply.

If you've sold it with owner financing and a note, then you no longer own the property, just the note. You can sell the note on the secondary market. There would be a discount on its face value. The discount would depend on the property value, the amount of down payment and the buyer's credit.