Is buyer's financing plan on the up and up?

[DAVE FREDERICKS]

I have a rental home that is being renovated. Last week a guy stopped by and asked how much I would sell for in the unfinished condition it is in. I've never sold a home before without going through conventional sources and could use some advice.

We agreed on $90,000, which is a reasonable price in this area and considering the work remaining to be done. He said he could close the deal in a few days but that hasn't been the case.

He wants to pay me $40,000 cash and move in the home for 2 months to complete the remaining renovations. After the work is complete he will finance the remaining $50,000.

My equity in the home is $40,000. The bank is owed the remaining $50,000.

He wants to set this up as a lease/purchase deal.

It seems like a good deal to me, I get my equity up front and in 2 months after he has completed the house and gets a loan, my bank get paid.

The main reason he is going this route is his bank will charge him a higher fee for an unfinished house. He doesn't want to do financing twice in just a few months, the first finance at a high rate, the second at a more reasonable rate.

Anyway, are there any problems that I should be aware of? I've read a little about an acceleration clause. Is this plan not acceptable to most banks who are carrying the mortgage?

So far nothing has been signed and no money has been exchanged.