Best Option?? FSBO, L/O, Sub2 Personal House

I’m moving and needing to sell my own private home. Here are some logistics on the property.

Loan Value: 138
FMV: 180 (exact comps seen)
3 yr ARM expiring this year, going up 1% per year for next 2 years
payment with Tax and Ins, approx $800
4 years in house
Ready to move in
I will be moving in 7 weeks

I met with a realtor and can get 6% and would be done with it, but saving that extra 11k would be nice.

How would many of you approach this situation. FSBO? List with a realtor and not worry about it. 24mo L/O, etc…

If you can give me some advice, I would greatly appreciate it!!!



I did this with my own home. Placed it in a land trust, then triple net leased it to a tenant/beneficiary providing me a nice positive cash flow. No 6% realtor commission – put that in your pocket.

My tenant is responsible for maintenance and repairs and pays the rent direct to the Trustee’s payment processing company. All I do is receive a cash flow check every month in the mail.

My trustee sends a letter to my new lender that confirms a triple net lease and there is no ding on my debt-to-income ratio for the new home.

Da Wiz

Hello Gary,

I have been learning Lease options for the past few weeks. I live here in Arizona and I am not sure what course to purchase?


Hi Stephen,

I think you’d be better off avoiding lease options in Arizona. I used lease options for more than 20 years. I don’t use them anymore. Here is why:

Here is a list of five things that may violate the law and cause the judge to classify the transaction as a “disguised sale”. This is not my list, but the list prepared by a Judge in Arizona who actually co-authored Arizona’s landlord/tenant laws (this is direct from the court transcript):

  1. Collection of more than 1.5 times the monthly rent as Option Deposit.

  2. Collection of an Option Deposit or Rent Credit to be credited to a Purchase, or to discount the Purchase as in a Down Payment.

  3. Predetermining a Purchase Price, as in delaying or disguising a sale.

  4. The Lessee also holding an option on the same property they are leasing regardless if it is one document or two separate documents.

  5. The Lessee being responsible for maintaining the property.

If the lease is not recognized by the court as a lease, it doesn’t get the benefits that go along with a legally recognized lease. If the judge feels a sale has taken place instead of a lease, the rules governing foreclosures will apply. For this reason, possession of the property will be decided by a judge in position to decide matters of title and the process can be extremely expensive. Costs can run $10,000+, not including having to pay the back mortgage payments during the life of the suit.

I’d stick with a land trust and a triple net lease. You have no responsibility for maintenance and repairs and your Trustee’s payment processing company collects your rents and pays your mortgage. It doesn’t get any easier once you have it set up.

Da Wiz

da Wiz,

Thanks for the reply…

What does it take to get this set up? I’m going to be moving out of my house, out of state within 50 days from now, and would like things set, and taken care of before I leave. Obviously, if I can’t, I can give or take a few weeks here or there while I’m away, but being over 11 hrs away, I’d like to have to all said and done.