Lease To Own Option

[Robert Littke]

Alright I will do my best to keep this brief but give the details.
If I have a $250,000 Single Family Home and I owe $228,000 and I want to move it fairly quickly. Payments are $1,470/mo. Market rent is probably $1,300 -$1,500
If I lease it out with a lease option at $1400 for 2 years with an option to buy and require $4000 down on the lease option, and apply 10% of payments to go towards down payment. When the purchase is made in 2 years, do I actually have to bring the $7360 ($4,000+$3360) to the table at close or just account for it on the settlement statement? What are the larger considerations that I should be concerned with on a deal like this. Thanks for you input. (This home is in NC, and I will be relocating to FL.)

[J Scott]

Check the laws in your state, but you may be required to keep the funds in a separate bank account, meaning you can't use them for anything else and you have to have them available. Prior to closing, you'll be asked to provide those funds to the closing attorney, who will keep them in escrow until you close.

The big thing to keep in mind with lease options is that most buyers never close on the property, so be prepared to find another buyer down the road, after doing any repairs necessary to find that next buyer.