Lease Option Through A Landlord
I've found a potential lease option deal through an owner who is a landlord. What is a good way to avoid the pitfall of a seller (landlord) wanting to use their own rental agreement during the lease option period? I want to be able to use the rental agreement that I have drafted. Thanks in advance.
You should be using an Agreement that is both an Option and a Lease in one document. A Landlord/Seller will sign if you can answer their objections to their satisfaction, and maybe giving them a concession or two if you must.
[addsig]
LOK, can you elaborate on that? I have heard that it's advisable to always use a SEPARATE lease and option agreement.
Thanks!
I'm not sure who says that, but as the T/B, you want to stack the deck in your favor should it go to court. You want it to be determined that you have an equitable interest in the property. Not that you would ever force the Seller to foreclose--just that you want to enter court in a postion of power. Having two separate Agreements would not further this cause.
[addsig]
Not sure about the 'right of assignment'? You should have an agreement with the owner that you can L/O the house for X number of years. Your agreement should include wording to the effect that you can sublease the house. It should not be a 'secret' that you intend to put a tenant in the property. Now, the owner doesn't need to be present when you show the house to the tenant/buyer.
Hope this helps a little.
Good luck!
I've been entertained lately with stories of owners becoming upset when their house was sublet.
As I sign the original lease with the owner and the sublet clause is included in the lease agreement I would be perfectly legal in subletting.
I guess I'm just being timid about upsetting an owner. The owners that had the sublet clause in their leases never expected it to be exercised and were upset when it was is what I was hearing.
It would be a good idea to inform the owner verbally of your intentions in addition to having the subletting clause in the agreement.
Psychologically, you are approaching the whole thing from the wrong angle. You should let the Seller know that you are planning to put one of your "clients" in the house and get that client qualified (hopefully) to purchase it in a year.
[addsig]
loakley,
I think I see the problem already.
You are NOT in control of your deal.
If the seller had the REI knowledge you do, then they'd set the deal up alone.
You are there because this is YOUR BUSINESS, so take charge of it.
The seller should not be present when showing the house at all, this is your potential tenant buyer, not theirs.
I'm curious, did you even indicate to the seller when presenting your L/O offer that you would be placing someone other than you in the house?
If not, why?
This IS how the business works, you set up GREAT terms, and sell GOOD TERMS, keep the spread.
Either via assignment, as you indicate you intend to do, or sandwich.
By the way, why the assignment anyway?
You are cutting yourself out of profit doing this, unless there was not really a 'deal' here in the first place, just easy terms.
Tell us more about how you presented the deal to the sellers, and perhaps about the deal itself, and advice/guidance will be forthcoming.
Once the deal is signed with the sellers, you should not have to deal with them at all until you assign or close the deal in the end.
Take care,
Jim FL
[addsig]
Perfect responses! Many thanks to all that posted. You are correct in that my company should tell the owner right up front "this is what we do".
If they don't want to play, "NEXT!"
Just newbie nerves here. Thanks!!