This was just on on-paper exercise, but I plan to leave all the cash flow in a dedicated reserve account until I hit a certain threshold, I was planning on $5K.

If so, I suppose another value add would be to potentially save the flipper some sales commissions, as well as an ability to close quickly if I exercise my option to buy at 80% of FMV.Cheers,Ethan

In this spreadsheet you will notice that the investor gets $20,000 nonrefundable cash option fee from the tenant buyer and collects a higher cash flow but still retains ownership until the option is exercised.

You're going to get your teeth kicked in once in a while, so use that to better yourself and your business and be an exercise in improving your grit and move FORWARD.Just remember, most of the battle is outworking and outlasting your competition. 

It will cost less than $100 and will be a good, low pressure exercise for you to learn with.Most likely, in the next 10 years or so, they will want to buy real estate and will finally come clean and pay you what is owed.

I use the word concept because until you get sued and win or lose everything is just an academic exercise up to that point.

Lease options can be structured in a variety of ways, the simplest and cleanest way is to charge an option fee and then rent, with a portion of the rent usually a fixed amount (ie $50 dollars a month or something) being credited toward an eventual down payment when they exercise the option to buy.  

Rehabbed the property and exercised the option.

I am not looking to get rich quick I am seeking the smartest way to exercise my freedom (moving out) at the lowest cost to me.  

I may have to get creative; I will certainly need to exercise more patience.Currently I'm paying rent to live in a duplex for $1000/mo and I was feeling rushed to start putting my money into equity, but surely it would be more responsible to take my time making the right choice on a good investment.Walkable as in East Austin?