Is there a formula or template for structuring lease options?

[Joseph Duenas]

Hello. I'd like to try purchasing a rental unit using a lease option.  Does anyone have a good formula/ template that they start with?  For example:

1. How much do you generally put down? 

2. How long does a typical lease option run for (i.e. 3 years)? 

3. Is there anything else I should put in the contract? 

While I understand that each lease option contract will vary depending on the seller, I was hoping someone might have a good formula for what to offer initially to the seller. Thanks. 

[Jack Shea]

I use two templates for lease options. 1) a lease purchase contract taking all the burdens of ownership; maintenance, taxes, mortgages, etc. You can then depreciate the property without owning it. You can do a 1031 exchange upon the sale with the profits, without owning the property. If the market sinks, you do not lose. If it goes up or stays flat you win. 2) For tenant options, I use a Contract for Option, which transfers no ownership benefits to the tenant and they can be evicted.