Lease option advice on a single family home

[Ryan Rea]

Hey everyone, I'm looking for information on the best way to structure a lease option on a primary residence that I'm trying to sell. I've been contacted by a couple who is interested in the property and they inquired about the possibility of a rent to own/lease option. I've never done a deal like this so I'm looking for advice on the best way to structure the deal and avoid mistakes. Thanks in advance

[Curt Smith]

A portion of my deals are selling on a lease and option to buy, I've also bought on lease and option.  PM me and I have a training I can email you.

You have to be able to hold this property for a few more years regardless of how short your option to buy term is.  Folks fail, can't clean up and get a bank loan, you are stuck with them as renters.

Given that; screening apps is MORE important because you are pre screening for a bank.  Take only stronger folks who will clean up and get the mortgage.  

Find a local mortgage broker who is willing to pre-qualify an applicant you find.  Yes after you screen them, send them to a mortgage broker to get a report of what they must do to qualify for a mortgage.  Do a 3 way call with the broker/applicant and go over their likelihood of getting a mortgage.

#1 they must hav a bank account with several $1k's, balance.  Ideally a few percent of the house price.  In your ad mention the min bank balance they need, then on first contact, immediately ask how much they have in a bank account, ask for a screen shot.  If not $3k, $5k etc skip those folks, they are not able to pull it off.   

Unless you are going to seller finance you will need folks to get bank mortgage...  which means get by an appraisal etc etc.

Your sale price has to get by an appraisor.  The rumor that you can jack up the price is false, if a bank is financing.  Only if you seller finance can you jack the price, and then I strongly recomend only offer to sell at market price.  I suggest: Just bank finance exit, don't get in deep by trying to seller finance to an occupant, many Dodd Frank issues, that are solvable , but why complicate this sale.