Subject 2 Lease option, what protection should I have built in for my self?

General Real Estate Investing
1

Greetings all,

I am reviewing a subject to lease option and I wanted to know what type of things I need to build into the contact to protect myself?

The current property is a 2 family and has 1 tenants in place, with a 2nd tenant coming soon. Now since I didn’t get to do the background checks on the tenants’ what do I need to include in my option contact to keep myself protected from the tenants trashing the place, or any type of lawsuits?

I know I can setup an LLC for that property that I can have him lease the property too. As well as have the tenant sign my version of the lease that I feel more comfortable with.

But I feel I am missing something.

Please weight in with some more options.

Thanks all.

2

Do these tenants have the option to buy the property? Did you do a lease with them or a lease purchase? I need to understand how you set it up before I can offer advice.

3

Sorry for the lack of clarity.

I would be doing a lease option to buy with the owner, then renting the property out to the tenants. The home is free and clear, and his asking price is 45K.

He has it rented for 475 for each unit.
Taxes and insurance are 1700 per year, with myself doing the management for right now.

Thanks.