CFO and a Lease

 For newbies, these abbreviations are...

CFD Contract for Deed,   

AFD Agrrement for Deed, 

LC Land Contract

LO Lease with Option to Purchase

CFO Contract for Option to Purchase

Every state has different rules.  See your contract attorney from your local REIA.

This is an introduction to a concept of Lease + CFO (Contract for Option)

CFDs, AFDs, and LC all have a concept in common, they have an agreement if...

You finish the contract, you get a deed or an opportunity to own (might have a balloon to pay - refinance, etc.)

So what is a CFO?

Contract for Option to Purchase.

If you comply and complete the agreement (e.g. make 24 on time payments) you get an option to purchase), if you do not, you don't get the option!

Couple that with a lease, you get a lease plus CFO.

Why is it better than a LO?

No option given until conditions are met.  No equitable interest.

Could be: 

- condition is to improve the property

- condition is to finish a 24 month lease with on time payments

Make up your own stipulations!

Next post is to explain the clauses in the CFO.