I have a motivated seller who is willing to do a lease-option on her place; she has agreed to allow me to try and bring her a tenant/buyer.
I know I need to do both a separate option and lease and then assign my interest once I have found a tenant/buyer. I plan to split the option fee 50/50 with the seller as my profit.
My question is where do I state that the lease will not start until I have found a tenant? Do I state this somewhere in the lease or in the option?
Thanks in advance.
Why are you splitting the option fee with the homeowner? That’s your profit and payday in the deal.
The lease start date needs to be specified in the lease agreement.
Never thought of it like that I guess; I figured it would be more attractive and they’d be more willing to do it with me.
What should I say in the lease agreement if I don’t know of an exact start date? How can I word it?
Thanks!
If you have to share that money to get the deal, that’s one thing. But to offer to split it without needing to, you are cutting your income in half. Don’t be so generous.
As for a start date, give yourself enough time to find a t/b. But then also have a clause that allows you to cancel at any time in case you can’t move the property. No risk to you.
AJ, About the start date. If you give yourself 90 days to find a t/b and you find one in 30 days then do you change the date? Or maybe you straight rent for 60 days and then the Lease Option starts? herbster
I simply move up the start date. I’ve yet to meet a homeowner who is opposed to collecting rent checks sooner rather than later.
In an attempt to prevent confusion, I’d like to know if this stipulation is sufficient enough to not need a separate lease agreement.
Here goes:
Basic Rights: Optionee has the right to exercise this Pure Option and convert this into either a purchase (via a Purchase and Sales Agreement) or a lease (via a Lease Option Contract). In addition, to these terms Optionee has the right to sub-lease or assign this agreement (via a Lease Option Contract) to a third party of his choosing. In accordance to these rights and at Optionee’s sole expense, Optionee reserves the right to advertise, market, place a sign in the yard, and do any means necessary to find a third party resident for the above premises. Optionee also has the right to enter the premises in making determinations of personally exercising this Pure Option or in order to show the premises to a respective third party. Consideration for these rights will be the services and costs aforementioned provided by Optionee.
And if this works, when the time comes to draw up a lease agreement between the seller and tenant/buyer, do I need to structure that for them or should I just let them go at it themselves?