You're clearly not understanding what a Lease Option strategy is, or how it works...and this format is very difficult to do the explanation justice. 

Thank you @Andrew Cushman for your explanation. 

@Bradley Bogdan Thanks so much for the detailed explanation. 

I would ask them for a strong explanation on that one.

At list price, it was tight, but doable if you had nothing else going on.So be careful out there RE investors, do not be scammed and take these wholesale deal offerings and explanations with a grain of salt.

The long explanation above conveniently skipped the fact that the taxes due on $35k at exit will be higher than the taxes paid on the $35k over the 5 years if the amount was not offset by depreciation loss.It’s ironical that the only way to realize the gains without paying taxes is to die.

Hi Mike,thank you for taking the time to write out this thoughtful explanation. 

Hello BP Community,I am currently in the process of purchasing my first home (duplex, 1 side is renter occupied) on an FHA loan in Vancouver, Washington.I have paid my earnest moneyI was initially given a closing date of April 24th, this date has now passed because the seller needed to do 2 more repairs to pass inspection, after the repairs were completed no further updates have been given to me for a new closing date.After the April 24th date passed my real estate agent sent me a lease out the blue with no explanation so I can rent the property while the deal is going through.

Talk to a title co (or attorney, whichever your state uses) to go over closing costs, amounts and explanation.

Of course, you will want to have a well defined explanation of roles (active vs. silent partner) and a Value formula which will be used to plug your numbers into to get a buy out amount.