Approached about buying for a lease option

4 Replies

A coworker of a family member approached me about buying a house and renting it to her with a lease option as she has bad credit (but a good job). I have been looking to buy a SFR to rent anyway--so I thought this might be a good opportunity to have a reliable renter who would treat the place well. I would appreciate advice on where to begin.

She has given me suggestions of properties she likes and one of them looks good to me--going to check it out tomorrow. I have a regular rental contract from an attorney but I don't have a lease option agreement.

Before moving forward with anything, I think you should make sure that this person is qualified enough to buy the house.
Or at the least can afford monthly payments and has no criminal background/evictions in the past.

There are many online services that you can use for this.

I would recommend to ask an attorney to draft a lease and an option document. 
Please make sure that they are two separate documents.

I can send you some docs if you want that you can run by your attorney to make it more relevant as per your state laws.

Yes Jeff.  This can be a great strategy in most markets.  It's one of my favorites because I don't have to spend any money to do it.  Any money I do use right away (a very small amount compared to buying a property), I get right back...with "friends".  Great strategy...but, you need the proper docs, and those docs MUST separate the lease from the option.  They are separate agreements.

Originally posted by @Account Closed :

...I can send you some docs if you want that you can run by your attorney to make it more relevant as per your state laws.

 Abhijeet, thanks so much for your tops, and yes, I would greatly appreciate those docs when you have the time to send them to me!

Originally posted by @Joe Villeneuve :

Yes Jeff.  This can be a great strategy in most markets.  It's one of my favorites because I don't have to spend any money to do it.  Any money I do use right away (a very small amount compared to buying a property), I get right back...with "friends".  Great strategy...but, you need the proper docs, and those docs MUST separate the lease from the option.  They are separate agreements.

 Thanks for your insights Joe!