How to Structure Selling House to Existing Tenant

[Aaron Vergason]

Hey BP Community. 

I have a 5 year old tenant who would like to purchase the house they are renting from me in New York State. We verbally agreed to a "Sale Price". The tenant would need me to be the bank for them due to them being self employed and not  showing a strong tax return year after year.

How would you structure this so everyone is protected? I am thinking about things like if there's a total loss fire, how am I covered? If they decide to install a new roof on the house, but only get through the demo phase, and quit before a giant monsoon, etc. how am I protecting this down side?

I will talk with my attorney about this, but I wanted to hear from people on here who have done this and may know some good tricks or tips to making this a profitable and relatively safe deal.

Thanks!

Aaron