Seller-financing vs lease-option vs land-contract

[Bret Halsey]

I have a 12 unit building that I'm in talks with seller on. He's offered it to me on a lease-option agreement, with a "purchase price" of $1.2M, "down payment" of $200k and 5% interest only payments on the $1M debt. Am I correct to assume this is very similar to seller financing however without title transfer since there's underlying debt he doesn't want to trigger due on sale clause? Any other detriments to the lease-option method I should consider or protect myself against? I'd be worried about making improvements on the property without really owning it yet. With regards to a land-contract, could that help me out in this scenario? What's the main differences there?

[Chris Seveney]

Quote from @Bret Halsey:

I have a 12 unit building that I'm in talks with seller on. He's offered it to me on a lease-option agreement, with a "purchase price" of $1.2M, "down payment" of $200k and 5% interest only payments on the $1M debt. Am I correct to assume this is very similar to seller financing however without title transfer since there's underlying debt he doesn't want to trigger due on sale clause? Any other detriments to the lease-option method I should consider or protect myself against? I'd be worried about making improvements on the property without really owning it yet. With regards to a land-contract, could that help me out in this scenario? What's the main differences there?

 This is where if it walks like a duck and quacks like a duck it is a duck, especially in ohio. I would not do a lease option as a buyer as others mention, but also if this is written the way you wrote it where its interest only payments and you have $1M debt - it does not matter what its called the courts will look at this in the same instance as a mortgage because of the substantial down payment and their is debt. My recommendation would be to get an attorney to represent you in this transaction - but the only way I would do this deal would be as a traditional note and mortgage.