Lease Option Purchase

[Susanne Owens]

My husband and I are 1 week away from our first real estate purchase that is not our primary home. We are using a checkbook 401k to purchase home and we were planning on long term renting it. 12 mo lease minimum. I wanted to do an option of 3-5 year purchase so we would build cash flow/equity and the let the housing market continue to climb and hopefully the home appreciate. We already have a perfect candidate a school teacher with 23 years tenure who is divorcing and who wants to lease purchase. The problem is she can only afford 1400$ a month. We were wanting (1750$ a month.) $1100 is the Insurance, taxes, mortgage and HOAs. It’s in a gated community and is a new build. How can I make it work for us and for her but not lose any money? The lessee has a house they are selling and she will have equity when it sells. Should we have her pay us at least 20% down when it does sell and then go under contract then but til then let her rent? I want to make it work for her but more importantly be a smart investment. Any advice is appreciated. Susanne Owens