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Lease Option: Anyone done this before?
I am considering renting a house with an option to buy (as an investment). The rental price would be $800/month with an option to buy the house in 2 years for price of $110,000. I would also get rental credits of $300 per month towards the down payment. I have someone lined up who would sublease the house from me for $950/month, and they would have an option to buy the home from me in 1 year for a purchase price of $125,000. they would get no rental credit towards the down payment. My question is this: Lets assume my sublessee is ready to get a loan in 1 year, how can I make money from this transaction without actually having to buy the house myself and get my own mortgage?....given the scenario I have presented above. I guess I see the larger potential, but do not know the nuts and bolts to make it happen. Any help would be appreciate, from a detailed answer to any links to any helpful websites.
Public Comments
- My father in law puts people in lease to own options and 95% of the time the deal falls through. Please get an attorney to read the fine print before you make any decision. This should only cost you less than 100 dollars and will probally be an excellent investment. In most lease to own contracts there is a clause basically saying the owner of the home can back out of the deal and quess what they usually do. It is basically a scam to get you to pay more in rent but because you sign a contract it is not illegal. Also as you stated as a concern it may be dificult if not impossible to get a mortgage without a significant down payment of 10 to 20 percent or sometimes more.
