lease options VS. owner finance

what are the differences between lease options and owner financing

A lease option provides your customer a rental agreement with an option to purchase the property as an agreed option price during the tern of the lease option

Normally with owner financing the property owner takes mortgage just like the bank and deeds the property over.

Now comes the bad part, their are multiple variations in both strategies.

Title does not tranfer on the lease option, until the terms of the lease option are met.

An owner finance deal, title is transferred at the table, in exchange for the mortgage note, which can of course be sold to a third party.

Good Luck!

It depends on how you structure it… if you “owner finance” using a land contract, it does NOT have to transfer until the agreement is completed and he cashes out.

I would suggest selling using a lease option though, it’s a lot easier (in most states at least) to evict a tenant than it is to foreclose on a mortgage.


I agree,

If you are selling, you want a lease option, however, if you are buying, you want an owner finance.