Hello all. My current tenant is moving out July 1st. I wanna do a rent to own/lease option. I have a few questions that I was hoping someone could help me. My current cash flow on house is around 500 dollars. So I wanna list house 218k rent to own. What is a good down payment 5% 10%? What are your terms usually.Also are you guys getting a attorney to draw up docs and help with settling on a deal? Does anyone have docs that I could look at to get an idea on how your structuring these deals? 

Originally posted by @Justin Kliphouse :

Hello all. My current tenant is moving out July 1st. I wanna do a rent to own/lease option. I have a few questions that I was hoping someone could help me. My current cash flow on house is around 500 dollars. So I wanna list house 218k rent to own. What is a good down payment 5% 10%? What are your terms usually.Also are you guys getting a attorney to draw up docs and help with settling on a deal? Does anyone have docs that I could look at to get an idea on how your structuring these deals? 

 You need a local attorney to draw up two sets of documents. One is a lease agreement. The other is an Option. You should set the Option period for 3 years or more, get 10% ($25,000) as a non-refundable Option fee and his payment is slightly above market rents for the property. The lease agreement begins and ends on the same days as the Option. None of the payment applies to the principal, you pay the property taxes not him, you pay landlord's insurance and he has renter's insurance. You still own the property so you get the depreciation, principal pay down, and other tax advantages. He has a set Option purchase amount and gets any appreciation of the property if he exercises the Option in the given time frame. Closing is done by the attorney.