A "Lease Option" is a great solution for many owners of both single family and multifamily properties. It can also be a great option for the buyer that may be in a temporary situation that prevents them from qualifying for a standard mortgage at the time, but will be able to in a short period of time.
The owner of the property leases (or rents) the property for a set period of time. This may be for 1 - 5 years, or any other time period agreed upon by both the seller and the buyer. The owner would be leasing to someone that intends to purchase the property.
The option portion of the agreement (usually a separate agreement) gives the buyer the option to purchase the property at any time prior to the expiration of the option agreement. (Usually the same time period of the lease agreement.) Optional items that may be negotiated, besides the lease/option time period, would be any rental premium, option fee, purchase price of the property and how any fees may apply toward the purchase price.
The lease/option can be a valuable tool for both the buyer and the seller. It is definitely a good option to discuss in any property purchase scenario.
An investor may also prefer this arrangement instead of an outright purchase, especially if the property needs repairs. This would enable the investor to use those funds for the necessary repairs and updates rather than tie up that money in the purchase of the property. This enables a better use of the investor's resources.
We can look at your property and see how we may be able to help you. Remember, there is no cost and no obligation to you.
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*First and foremost, we advise anyone to check any agreements with a competent local real estate attorney prior to signing anything, as state requirements may vary and laws may change at any time.