Lease Option Agreements ?

[Don Kephart]

Sorry if this is long winded! But I do have a few questions pertaining to Lease Option Agreements.

Can I use the same “Lease Option Agreement” for both sides of the “seller/me” and “buyer/me” , and just change the terms?

After I find “tenant/buyer” for “seller/me” for the “home owner”, I want to leave the deal because of no equity, or I just don’t want to stay in the deal. Do I just simply “assign” the Lease Option? Is it really that simple and easy? If so, do I “assign” the “tenant/buyer” LOA to the “home owner” or is it the other way?

This is the one I’m have problems with, in a sandwich lease. At the end, and time of closing with “tenant/buyer” how do I reflect the “tenant/buyers” $10,000 “deposit” or “non-refundable consideration fee” if the “tenant/buyer” believes that the $10,000 is going towards the $120,000 purchase price of their new home?

SELLER/ME                                                                                           TENANT/BUYER

AGREES TO $100,000 purchase                                                      AGREES TO $120,000

           $1,000 DOWN                                                                $10,000 DOWN

                    $900.00 IN RENT/MO                                                     $1,200 IN RENT/MO

In the front end, I will be getting the $9,000 from “TENANT/BUYER”, on the back end I’ll get the rent spread and the difference of $10,000 at the time of closing. The “tenant/buyer” is going to tell the loan company the need $110,000 loan because that already put $10,000 “down”! How do I structure this deal to make their $10,000 non-refundable fee apply to the purchase price as a “down payment”?

Any and all insight would be greatly welcomed as I am very axoins to get this going.

[Joe Villeneuve]

None of this is correct.  You are mixing up a number of things.  The SLO is pretty basic.  Let's start with the "what you never do" list:

First rule -  Never combine the two (lease and option) in the same agreement

Second Rule -  Never connect the lease and the option.  These are two separate contracts.

Third Rule -  Never give rent credits...ever.

Forth Rule - The Option Consideration is the act of the person buying the Option.  It isn't a deposit on the property.  When someone pays the Option Consideration, they are paying 100% for the Exclusive Option to buy the property within a stated period of time ..they are NOT putting up a down payment on the property.