What should I offer in an early buy of a Lease Purchase contract

2 Replies

Hello follow BPers! 

I'm six months into a 2 year Lease Purchase on the current townhouse I am residing in. Owner is asking about closing unit now. I'd like to make a "buy now" offer and would love some suggestions on what to offer. These are the numbers:


Purchase price: 138,900 (within 1 yr), 141,400 (within 2 yrs)

Down paid: $5,000

Monthly rent: $995 (I clues taxes, ins, HOA)

Market value at time of purchase was $138k (6 MO ago)

Current value: 2bd/3ba, unit (same Sq ft), higher end kitchen on busy side of road was just listed at 161,900 went under contract within a week. Still pending.

I estimate value of this unit around $155k as is, projecting about $170k at the end of the 2yr agreement.

Current market rent $1500.

No mortgage on property 

Should I make an offer, she wants to sell now due to personal reasons. She's also asking about taking posession back. Or should I wait out the 2 year period? If I bought now I would want to flip it or continue to live in it for another 6mo - 1yr, but not turn it into a rental.

Maybe she's giving me a story since she realizes she sold herself short.

I look forward to the feedback!

@Joey Middlemiss  

Sounds like you've happened onto a good opportunity.  If your agreement is solid it won't matter either way that she sold herself short.  First, I'd talk to a lender to see what you qualify for.  Get prequalified so your offer has credibility.

Then get as much time together with her so you can determine her reason for wanting out now. 

Then you might go to her and simply say "I love the place but the timing is not what I had planned for and is not ideal, but my lender says I could get $x and could close in 30 days if that works for you."

I would probably start at about $125,500 and inch up as needed.  (I like non-typical numbers!) If she balks you still have your agreement and can wait it out.  Her asking for an early cash-out is certainly worth at least a 10% discount.  However, you know you already have a 10% upside built in, so you can decide how much it is worth to you to cash her out early.  Good luck!

thank you Curtis!

You've got my wheels turning. Greatly appreciated.

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