Lease Option Help!
I have a house with FMV of around 82k. I want to lease option the house out for 1 years. The average rents in the area is 800-850 a month. What would be a good down payment (option consideration) for the buyer. This is what I was thinking.. let me know if this would work or if there is a better solution.
1. 2500 down
800/month no portion of it going towards purchase price
2. 2500 down 850/month 50 going toward purchase price.
i think that is very fair. you are only asking for 3% of purchase price down,which is less than alot of banks. but if the buyer wants to put credit toward in the rent why not let them pick how much!tell them anything over 800 is credit
With FMV @ 82k, I would set the option price @ 86k, get 4k for option consideration, and charge 900/mo. w/no rent credit or 950/mo. w/ 50/mo. rent credit.
You are adding value by financing the property (maybe only temerarily) while the T/B works on their credit to get the loan to cash you out.
What percentage do you guys use when considering for option down payments?
Rent credits are "additional option consideration" to be applied to the downpayment with the option consideration only if and when this option is excersised.
No legal advice, just how I do it.
JD
ok, Seems like it would be best to not give rent credits. Thanks for the advise.
Can you give opinion on this?
Using the 82K (FMV) as above...... But the house is in much need of TLC (needs about $10,000.00 in update/repairs.
How would you least option this house?
Thanks