John Rubino, Greg Fend, Ryan Logsdon,
When I structured Lease Options, the Option Fee (up front, non refundable) and $150-$200 of the rent (which was above Market Rent) did not come off the sales price when the buyer exercised their option.
I found what my buyer needed most was help with a down payment (and documentation to show their lender that they had made consistant payments which positively influenced their credit score).
They had great incentive to pay their rent on time each month since I tied it to the Rent Credit. Our agreement stated that I would credit them the $200 toward their down payment only if they paid their rent on time.
Also, I did not need to put their money aside. As was stated in an earlier comment, it was mine either way. (I of course did not state it this way to the buyer). I explained to the buyer that the Option Fee and their Rent Credit would be "credited" to their down payment at closing.
It was stated as such on the Settlement Statement. I simply received less at closing but more upfront and each month. It was not difficult to sell the idea to a buyer. A win-win all around.
