How do you structure a Lease option

[Brendon Rogers]

I’ve been curious as to how people are doing their lease option agreements. I initially wanted to buy a property with hard money refinance cash out and do a owner finance to a prospective buyer. (wrap around mortgage) After speaking with real estate attorney he brought up the due on sale clause being possibly triggered in those kind of transactions. He says he does lease option in those kind of situations to avoid the due on sale clause. So my question is how do you run the numbers on a rental property like this? Do you use a property manager to collect the rent or loan servicing company? Does the rent that the tenant pays go toward paying down the agreed price? Then when the option period is up they pay the remaining amount? I’m just curious how people are doing this and how you run your numbers.