first L/O.....can you help???

General Real Estate Investing
1

Hey all,

Under a lease/option agreement who pays for utilities? How much downpayment? Terms? Rent credits? What if I find another buyer that wants the property during the L/O period? Can I null and void that agreement? Anyone have a solid L/O that I could get to my attorney to make sure its Wisconsin compliant? Any help would be appreciated.

Nate-WI

2

I’m just another newbie but from what I understand:

Your tenant pays for utilities - it’s generally this way under a standard rental agreement as well unless it’s an apartment complex or something, no?

Terms can be decided by you and they can differ between who you’re buying from and who you’re lease optioning to. You could very well tie up a contract for 6 years but only offer a 3 year L/O to your tenant. If they choose not to exercise their option you have another 3 years with another tenant possibly.

I believe most people generally ask for 5-10% downpayment. I’ve also heard of a lot of people asking for just a flat $10k, this is pretty flexible from what I’ve read.

If you find another buyer during the L/O period you can’t just evict your tenant without cause.

I don’t have a contract I could give you. I’d love to get my hands on a standard one that’s used a lot too.

Hope that helps some.

3

go here for free contracts
http://www.buyincomeproperties.com/FreeRealEstateForms.htm#leaseoptions

4

Under a lease/option agreement who pays for utilities?
Tenants usually pay utilities. Makes sure it says so in your agreement.

How much downpayment?
You want to call it option fee. That’s up to you. 2-5% is in the normal range.

Terms?
They are what you make them.

Rent credits?
You want to avoid this due to the equitable interest thing.

What if I find another buyer that wants the property during the L/O period? Can I null and void that agreement?
No, it’s a contract.

5

seems like you have to pay for everything that site links to to me…

6

Lease options are great for buyers, not so great for sellers. “Equitable interest” is very difficult to avoid and costly if invoked by the tenant.

Da Wiz

7

sorry, I looked at this again and it looks like you gotta scroll down past the ads to find the good stuff.

Thanks for the link!