Assigning Lease Options To A Tenant Buyer

30 Replies

I HAVE A BUYER IN PLACE WHO WANT THE HOUSE I HAVE UNDER L/O WITH SELLER. WILLING TO PUT DOWN 5% OF PURCHASE PRICE AND PAY MONTHLY RENT A MONTH. I PUSHED IT TO HIM FOR 10K MORE THAN I HAVE WITH THE SELLER. WOULD I REPLACE THE OWNERS NAME WITH MY NAME AND THE AMOUNTS BETWEEN ME AND T/B TO GET MY FEE UP FRONT AND CATCH THE 10K ON THE BACK END. THEN TURN ALL PAPERWORK INTO TITLE COMPANY TO TAKE CARE OF THE REST CORRECT? I BELIEVE IM ON THE RIGHT TRACK JUST WANT TO VERIFY.

@Vince Mayer I would need to have the money taken care of through escrow. Its a L/O with the option tho purchase. I have with the seller for $250K and $1800 and found a tenant buyer who want to L/O the house for $260K and $2000 a month.

Originally posted by @John Thedford :

@Russell Brazil

Any thoughts? 

 This is an area of real estate I know very little about. Lease options, wrap mortgages, etc. I deal with mostly straight forward stuff

With an assignment (LOA), all parties remain - seller is Optionor, you are Optionee. You assign for a fee and are done.

With a sandwich, you perform with the seller as agreed initially. When you sub-lease, sub-option, you become the Optionor because you now have the right to Option to your TB.

Sandwiches are not for rookies. You are responsible for the performance of the TB and for the property condition for the whole term. If the TB doesn't pay, you have to. When the option expires, you are responsible for removing your TB, catching up all missed lease payments and getting the place back to current condition. 

@Steve Vaughan   Thanks. So assigning would be my best strategy because this is my first. So would I get my fee at signing the introduce the buyer and seller afterwards? Have a appointment with modifications of paperwork and escrow holdings for Sandwhich lease but if simply assigning it is easier I would rather use that route. And would I still need a closing attorney. And could I still use option fee amount as my assignment fee?

Check VA RE regs to make sure this is legal. Don't always rely on BP for LEGAL info. Go straight to the state or a GOOD attorney that knows the laws.

@John Thedford   I agree. The lawyers want to charge me a $150 consultation fee, and its not even confirmed if they will be knowledgeable on what I am speaking of. Waste of 150 if you ask me. I am seeing that you can get a real estate agent to take care of it. Thing is Ive already found a buyer highly qualified to assign my options over to.

@John Thedford is right.  You need state-specific legal advice.  In TX for instance, SLOs aren't legal in any form.  I'd pay $150 for knowledgeable legal advice if I was this lost any day of the week.  

I'm just a what and why guy. Not how.  Free 'get deep in the weeds' advice about a state I know nothing about is not only thankless but opens me up to liability. 

Follow some of @Brian Gibbons posts on LOAs and SLOs.  He's literally written thousands.  Good luck.

Originally posted by @Victor Maxey :

I HAVE A BUYER IN PLACE WHO WANT THE HOUSE I HAVE UNDER L/O WITH SELLER. WILLING TO PUT DOWN 5% OF PURCHASE PRICE AND PAY MONTHLY RENT A MONTH. I PUSHED IT TO HIM FOR 10K MORE THAN I HAVE WITH THE SELLER. WOULD I REPLACE THE OWNERS NAME WITH MY NAME AND THE AMOUNTS BETWEEN ME AND T/B TO GET MY FEE UP FRONT AND CATCH THE 10K ON THE BACK END. THEN TURN ALL PAPERWORK INTO TITLE COMPANY TO TAKE CARE OF THE REST CORRECT? I BELIEVE IM ON THE RIGHT TRACK JUST WANT TO VERIFY.

 Sounds like maybe this is an assignment - I have limited knowledge in this space, I like straightforward deals. Are you a realtor or just "wholesaler" ? Sounds confusing - why is someone being pushed into something higher than what it is listed for ?? 

Originally posted by @Steve Vaughan :

@John Thedford is right.  You need state-specific legal advice.  In TX for instance, SLOs aren't legal in any form.  I'd pay $150 for knowledgeable legal advice if I was this lost any day of the week.  

I'm just a what and why guy. Not how.  Free 'get deep in the weeds' advice about a state I know nothing about is not only thankless but opens me up to liability. 

Follow some of @Brian Gibbons posts on LOAs and SLOs.  He's literally written thousands.  Good luck.

Thanks Steve. I coach LOAs, VA md MD and DC I would get my RE license and list the house for a lease option sale with a 3 percent fee.

@Victor Maxey It is also important to take a look at the option to buy that you have. To see if it is exclusive or not. We do lease options in Arizona but they are exclusive to the person who we put into the property. If they try to sublease it without our consent the option becomes void.

You can have your attorney look over any document you wantattorneys don’t know the agency laws as far as acting as agent

I wish more licensed agents would discuss how lease option works for Sellers and then have a listing that offers a lease option to a buyer and earns 3% for a commission

Originally posted by @Victor Maxey :

I HAVE A BUYER IN PLACE WHO WANT THE HOUSE I HAVE UNDER L/O WITH SELLER. WILLING TO PUT DOWN 5% OF PURCHASE PRICE AND PAY MONTHLY RENT A MONTH. I PUSHED IT TO HIM FOR 10K MORE THAN I HAVE WITH THE SELLER. WOULD I REPLACE THE OWNERS NAME WITH MY NAME AND THE AMOUNTS BETWEEN ME AND T/B TO GET MY FEE UP FRONT AND CATCH THE 10K ON THE BACK END. THEN TURN ALL PAPERWORK INTO TITLE COMPANY TO TAKE CARE OF THE REST CORRECT? I BELIEVE IM ON THE RIGHT TRACK JUST WANT TO VERIFY.

 Jesus dude... Do we need all caps? 

Originally posted by @Victor Maxey :

@chinmay j. How relevant is that to the conversation? Absolutely irrelevant.

When I saw all caps, my eyes glazed over the chunk of information you posted, and I didn't even bother to read it. Based on the title of the post, maybe it is related somehow to Lease Option. So..... what conversation? lol

It's a common courtesy on the Internet, not to post in all caps, as it's considered yelling at someone. It's sad I have to explain this. 

I have a "rent to own" buyer in Texas who contacted me via my website

I do not do Lease Options in Texas and told her I would try to find someone who did.

She is looking in the Murphy/Plano Area and has a down payment. PM me if you you can help her out.