Please Keep Me On Track (L/O)
I rehabed a house with partner's money, then we put it on the market. now I am learning about Lease Options and I think that will be the best way to sell fast and for more. So here is the deal: I put an ad in the local classified paper today. I think I can get people to look at the house. Then I think I can get them to agree to a L/O. But then what??? I have some forms start with an application then I screen them, then I pick one, then they give me an option fee (not deposit or down payment) then do I need a trust for the title? do I need to put it in escrow? how many (and which) documents do my new tenants need to sign? Do they need to be notarized? As far as them doing repairs is the first $300 a month enough and fair? (I've heard as much as $500 per repair and as little as $200 per month) I mostly need help on the contract/document part. Thanks for your help
Isn't networking great?
Josh
L/O 101...
A lease/Option is really a two-part contract. The first part is a lease of the property, period. This really has NO relationship to the second part, the Option to Purchase. You just package both agreements in one package, and presto, you have a lease option deal.
Some say to seperate the contracts into two seperate deals, I just add an option clause in my contract instead. If you would like a copy, PM me.
Regarding fees. I have the lessor pay all major repairs up to $500. I make it clear to them that the house is theirs (Even if it is just in their mind), so they take better care of it, and I have less maintaince.
You file NO legal paperwork on the deal as you have not sold the property until they excercise the option to purchase. Until that time they are really just rentors who paid a premium for the chance to purchase the property in a year or two.
[addsig]
When I put ads in the paper, I use that to get people to call in. Once the call me I take an application, then I see if they are a canidate for a mortgage. Then I ask them since they can get a mortgage why not buy the house. If they have good credit sometimes I'll do a Land Contract or a Lease Option with a ballon payment. But most of the time I would rather get my money while they are still eligible for a mortgage. This way I can move on to the next one. I have noticed it has been getting harder to evict people in a Land contract or Lease Option.
But anyway I get all my forms from a book called "301legal forms and agreements"
Lori