Hello everyone i really need your help. I have a multi unit house well im going through the closing process.
I want to lease option one unit and rent the other unit out through section 8. Then after a year sell the house to the tenant with a renter already in there. Have you ever seen anyone lease option a multi unit?
This is my first deal of any kind so what do i need to lease option do i need a lawyer to draw up the contract or I can buy a book with docs already?
I have 30 days before i close and i want to be ready to rent to own on my 31st day so whats steps do i need to take now to be ready then?
Are you sure you can sell just one unit? You may want to look into that. If they are on one deed now, I don’t think you can just sell one. There’s definitely some work to be done.
I just completed the purchase and sale of a Lease with an Option to purchase on the same day I sold it. I made did well on the deal. We did a double close. I didn’t have a lot of extra closing costs and bank qualifing issues.
There are some additional concerns that you should have before you sell.
First if you are a seller, the buyer could default on the loan to you and you could be forced into a judicial foreclosure which could take up to a year is some states. I would guess each state is different.
Second, are you leasing the entire building or just the unit. Because if it’s the building the purchaser could collect the rent from the other tenant and not pay you. Can you afford to carry for a year and pay legal fees.
I am not tring to be negative because I used it once and I would like to do it again since there was little risk for me. I think a Lease option can be very beneficial for both parties but make sure they are qualified and you get a good deposit.
One way to protect yourself is to consider using a trust. (not an expert) because it would be more like evicting a tenant than a foreclosure. I am just learning about all of the different tools available to the investors.
It would not hurt to consult with a lawyer they may recommend certain forms for your area. You don’t neccesarialy need one. You can get generic forms from staples of Office Depot. You could Google "lease option forms’ and see if you can find a freebee.
Other people strongly suggest that the Option to Purchase be a seperate form from the lease contract. This could help reduce the buyers claim to equitable interest. I sure you will get more indepth responses. I have only done one L/O.
Good Luck
NDI
“Second, are you leasing the entire building or just the unit. Because if it’s the building the purchaser could collect the rent from the other tenant and not pay you. Can you afford to carry for a year and pay legal fees.”
Well i want to lease him the flat and the option to buy the entire house in a year.
“Are you sure you can sell just one unit? You may want to look into that. If they are on one deed now, I don’t think you can just sell one. There’s definitely some work to be done.”
I am not trying to sell 1 unit im just giving 1 tenant the option to buy the entire house and that tenant become the landlord.
What direction should i be going in what is my first step ??
Sorry I have been very busy on a rehab with long hours.
I am just trying to understand if the person who is getting the lease of the whole building then he could collect the rent from the other tenant or if the other tenant is going to pay you directly?
I would use two documents one for the right to lease one unit. the second document would be the ‘Option document’. There are several attourney’s on the site and hopefully they will have some more insight?
NDI