Closing A Lease Option

How do you close a lease option? Meaning, when your tenant/buyer is ready to cash you and the seller out?

Is this done by simulataneuous closing?
Do you assign your option to buy?
Please answer.

JB
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Comments(7)

  • LeaseOptionKing17th January, 2005

    I use a simultaneous/collapsed closing.
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  • jdflybuy17th January, 2005

    Wouldn't it cost less to @ssign the option for your spread , to the sub-tenant/buyer at the closing? Assuming this is a sandwich lease. Or is there a problem I don't see in doin it this way?

    JD

  • LeaseOptionKing17th January, 2005

    Depends on the size of your spread and how you get paid. Assignments can present other problems, such as the T/B knowing your profit.
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  • jbinvestor17th January, 2005

    Is this also the case when you are closing a straight option?

    Do the simultaneous closing?

    Does that creat problems with a new buyers lender? Or should I do my own due diligence and lead buyers to lending where this would not be a problem?

    Or will it pose a problem at all? Doing a simultaneous close on a straight option. Wouldn't the lender want to verify I have title to the property?

    JB
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  • LeaseOptionKing18th January, 2005

    If you are using straight Options on junkers (wholesaling), seasoning is a nonissue, because professional rehabbers either use their own cash or private lenders (hard money). Otherwise, you have to find a lender who will treat the deal on a case-by-case basis (and base their lending upon the comps regardless of the time involved).
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  • jbinvestor18th January, 2005

    what about non-junkers.

    say a $150,000

    you have an option for $100,000

    if you found a buyer for $125,000

    would you do a simultaneous close on this? would the lender have issues because you (when you are selling) do not have title to the property?

    JB
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  • LeaseOptionKing19th January, 2005

    Depends on the lender. Some do. Some are flexible, providing you can prove the value.
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