Sounds like your describing a Lease Option Agrrement. essentually the Lease Form, the Option Form and possibly a Memorandum of Option. If you count all the rent towards the purchase price you are being very generous. Its call the rent credit. Just search and read here before you jumpinto this and maybe take a course. Consider the course as cheap insurance you get it right. Herbster
Herbster’s correct. What you’re describing is an Option Contract.
Add the Option contract to your lease agreement, however not together, separate forms…
Also, about 95% of our deals, we do not give rent credits. We only give rent credits whenever
the buyer asks for it. So if your buyer has asked for rent credits, I probably wouldn’t go over 5%
of the monthly rent for credits…
Let me back up a little. The rent will not go towards the downpayment. The downpayment in these deals is really called the Option Consideration and that will go towards the downpayment. Jeff says 5% rent credit and I say a little more. At one time the rent credit would go towards the down, but that may not be true any longer. The rent credit actually works like paying down the principle on a conventional mortgage. See why you might need to read alot and take a course.
So you want to buy a house and then set up a Rent To Own with a tenant/buyer. Excellent strategy if you do it correctly.
Just be sure you do the deal correctly and have some good agreements to back you up. You can check out a number of courses on lease options to guide you. Claude Diamond, Michael Carbonare, and Bill Bronchick come to mind.
In my opinion you can’t beat Carbonares course for the money. He is quite legit. His forum is awesome, packed with everything you need and he answers his forum dayly. All the forms also but check them to see if they are compliant with your state. You should do that with anyones course. Herbster
Mike doesn’t do the seminar circuit any longer. I talked to him about that once and he said it was too much like being a snake oil salesman and he just opted out. He’s still active on his site and as an investor. To me that’s a lot more important than going on tour and selling.