Need help setting up Lease Option Deal!!

OK, I own a house in Cape Coral, FL and I have been trying to sell it FSBO, had a lot of interest, but no offers. House is worth about $510k, I owe $410k. I just got a call today from a lady that is interested in a lease-option. I said I would be interested in that, only because I remember reading if you are having trouble selling to go lease option. BUT, I am not positive about how to do this. What contracts do I use? Does she only sign a lease agreement now and then sign a purchase and sale when the lease runs out OR should I have her sign the lease and purchase and sale right now?? One thing that I am thinking is that I am going to refi the loan I have right now to get it into a Neg-Am program, only because I am moving to Orlando and Im planning on buying a house and Im not sure how long it will be before I have money coming in, so I would like the option every month to pay a very low amount. My mortgage payment including taxes and insurance will be about 1600, and I told the lady I want $1700 for rent. The Neg-Am loan would have a 1 year hard/2 year soft prepay so I can sell it to her after a year without any penalties. Im thinking that I would get her to sign a 1 year lease at $1800/month and set the sales price at $489k. $100 of the rent payment every month will go towards the down payment of the house. Thats about all of the info, can someone please help me in structuring the deal and also let me know what forms I should use. I only have experience with FAR-BAR purchase and sales. Thanks!!!
P.S. Land Contract?? would that be better for me in this situation??

Hi Pete,

I just gave this same answer to another who posted a similar question. In the past I used lease options often (in fact, I once wrote a book about them in the '80’s). I don’t use them anymore as a seller. Reason: in the event of default, the tenant has an excellent chance of claiming an “equitable interest” in the property forcing you to foreclose (a very expensive and time-consuming procedure). In addition, courts are now defining many lease option agreements as “disguised sales contracts”, and state legislatures, influenced by the realtor lobby, are passing anti-investor laws such as in Texas where lease options are all but banned.

The drawback to a land contract is similar. In addition, the date of sale of a land contract is the date you sign it, presenting a tax consequence for the seller.

Both methods are excellent from a tenant standpoint but present potential problems for the seller.

I recommend combining a land trust with a triple net lease to avoid these potential problems and to provide asset protection. I hope this information was of some value to you. Good luck.

Da Wiz