In some states, it is against the law to collect more than a couple month's rent, so you have to check into that.I automatically turn down any applicant who wants to pay a year in advance.For an existing tenant who has been a good tenant, I would take the money, put it into escrow and pay myself month by month as it came due.Tentant would still be on a month to month agreement and if I wanted him out, I'd give 30 day notice and refund the balance of the rent.An exception: If I rented to college students, they sometimes pay the entire semester's rent out of their grant money.

Having recently completed my taxes for 2008, I was seeking ways to properly strenghten myself for dealing with the IRS in 2009.

So while I'm not going to say whether or not you should go through with it, I'll try to provide you with some things to consider when making your decision.Pros:You can get the payment off your booksYou can sell the property for full price, when it doesn't appear that there is much interest right nowAssuming you are requiring an option payment (which I would suggest), you will get some additional cash nowSo basically the Pros can be summed up in that you have the potential to do pretty well financiallyCons:Lease options typically require less landlord hassle, but at the end of the day you are still a landlordThey could trash the house and then not buy itThey could stop paying and make you evict them, costing you time and money (there is also the possibility with lease options if they aren't structured properly that the courts could deem them to be a sale rather than a leasing arrangement in which case you would have to foreclose instead of the less painful eviction).

I understand that without proper meeting minutes a savvy lawyer has a better chance to pierce the corporate veil.

I try to strike a balance between security and practicality.Good Luck,Mike

If someone paid $300K for a house, got 100% financing (common a few years ago), they would need to make payments for 17.5 YEARS before the balance was down to $200K.

IncomeRent $750ExpensesPITI $815Misc $300Negative cash flow $365.Since taxes vary locally, it’s hard for me to know how much is going toward the principal balance each month, but I’ll assume your initial loan was for 125K and say:Cost to sell this place now (commissions, closing costs $10,000)10 years of carrying costs: $43,800Principal pay down over 10 years: $20,26820 years of carrying costs: $87,600Principal pay down over 20 years: $57,49630 years of carrying costs: $131,400Principal pay down over 30 years: $125,000It seems like the negative cash flow outweighs the benefit of keeping this place, unless you just want to have an extra piece of real estate for your child, parent or whatever.As an investment, it does not seem to make sense.

Dwayne - If I had to correct all of the grammatical and punctuation errors on the forums, I'd be doing it full-time.Sadly, as instant messaging emerged as a form of communication, the proper use of the English language declined.

If you can find a deal where the rents properly support the investment, it shouldn't matter if the property is a foreclosure or a listed property.

I utilize this technique properly therefore I have had alot of success with it.