Lease option protection

Iv been reading alot on Option deals, and have a couple questions. If I created a deal with a seller for a lease option purchase, then lease purchased it to a ten/buyer, and the ten/buyer opted to not buy, is he/she entitled to equity? How do i protect myself in that area? Is this why two seperate contracts are needed? Lease and a purchase contract?

Also if the ten/buyer after moving in the home then filed BK how do i protect myself from that?

Peter Conti, good reading any insight on his ebook?

Thanks for the knowledge

If the T/B opts. not to buy then they forfeit everything, equity isn’t even an issue. herbster

It’s an option to buy, not an obligation. So if they walk away at the end of the lease, no harm, no foul. You can either find yourself another tenant/buyer, or opt to exercise your option to buy if the deal makes good financial sense to do so.

So there is no ground for tb to say he has a stake in the home under such a deal?

Is it best to have two seperate contracts? Lease and purchase or just one?

The only time it matters is in court. The judge will look at all the evidence, the size of option fee, lease term, who pays maintenance/repairs, how the parties act, etc. If he thinks it’s a sale, he will treat it like a sale. It doesn’t matter what you call it. It matters what it looks like.

One contract between you and seller, two contracts between you and t/b.
If you take a big option money then the t/b might claim they have equitable interest, not good in court.
You shouldn’t exspect a t/b to replace a furnace or something so make them only responcible for minor repairs.herbster

Alot of help guys,
Any thouhts on the L/O being done on out of state properties? I have a rental property in Oregon and family there so im interested in L/O there yet i live in Calif. Seems to be the same but looking to see what pitfalls to Be Aware Of? And if its feasable?

Any thoughts on Perer Conti’s L/O teachings?

I like the theory and possibillities. Actively searching for Motivated Sellers.

Thanks Again