You can have the seller sign a performance mortgage or
record an affidavit, or have seller sign a blank promissory
note, when it comes time for the buyer to purchase the
house and when you know exactly how much your profit
will be, you can put that amount in the promissory note.
Have an attorney structure the promissory note so you
don’t run into any problems.
Also, I don’t like purchasing a house via a lease/purchase.
I would rather purchase via a delayed closing contract,
you have more protection and control of the deal, in my
opinion. Plus it looks better when you present it to the
Here’s a delayed closing;
You simply have a Standard P&S agreement, with all of
the normal stipulations that will protect you as an investor
buyer, and in the closing date section, you put 1, 2, 3,4, 5
years or however long you negotiated.
This method will also help you get around the no Lease/option
laws in Texas, for those of you in that state…
A simple way to do the deal might be to sell your option to the sandwich lessee and then let him close the deal. Unless you have a real sharp escrow officer some of the unorthodox methods could blow up in your face. My lease option report might be of help. Its at the RE blog link in the sig below.
First find a title company that doesn’t require you to have funds.
If that doesn’t work, check out your contract. Do you have the full right of assignment? Meaning do you have the right to sell the property at anytime? The seller can grant you this right. Talk to your attorney about it.
If that doesn’t work. Let the seller close directly with the buyer, but make sure to draft a invoice between you and the seller. Talk to an attorney to make it binding.
If that won’t work, try assigning your contract to the buyer for the amount of your profit spread less any other costs.
With that said, don’t let this hold you back. It sounds like the Title company hasn’t said this yet and that you might be thinking ahead. Just don’t let it hold you back. Deal with it when and if it comes.