Advice Needed - Lease Purchase Agreement

[Donald S.]

Hi all, I have been in the process of trying to purchase a first home for the last 8 months without luck. My realtor (and friend) owns a number of properties and recently offered to sell one to me through a lease purchase agreement. He presented a lease purchase agreement because I would not be able to comfortably afford it with current interest rates.

It's a new build (2 years old) SFH with a detached ADU above the garage. He verbally proposed an idea that I move in and pay rent on the whole property while collecting the income from the ADU. We would agree on a price today and split the appreciation up to the point where the agreement executes and the title is moved in to my name. Hopefully at a time with lower interest rates.

This is in a nice neighborhood of Denver. The ADU has a great tenant in there through summer. I think the property would sell today between 1M and 1.1M. His note is ~$500-550k. He listed it for 1.2M two years ago and it didn't sell, so he's been renting it out.

I'm looking for some advice on questions to ask him when the agreement is presented and your advice is appreciated. A few that I've gathered so far:

Will a portion of rent go towards down payment?

Can appreciation of the property be used towards a down payment at a later date?

What are the worst case situations that I'm not thinking of? I have to move, I lose job, he dies, etc.

Who pays taxes and insurance?

Thank you!