Lease Option




A Lease-Option is simply a lease agreement combined with a option contract, which gives the new tenant/buyer the right to purchase your home under specific terms.


Here’s an example that we have actually done:

The seller wants $135,000, rent of $1150 per month with a rent credit of $200, and a term of 2 years.

Sales Price: $135,000                                Monthly Rent: $1150
Rent Credit: $200 Each Month                 Term: 2 Years

(Rent credit is only a paper credit. It is deducted from the purchase price.)

Usually there will be a monthly rent credit of 15%-25% of the rent. This credit is applied to the purchase price ONLY! So if the new buyer buys in 1 year, they would have a total of $200 x 12 months (1 year) = $2400. Subtract the $2400 from the total sales price of $135,000. 

                                                                              $135,000 – $2400 = $132,600 
(This is the new purchase price)

(Rent credits are a great incentive for buyers to always pay you on time or they do not receive a credit for that month.)

                                                                             What’s The Point?

You may be asking yourself, “What’s the point of this real estate lesson?” Well, first we are Real Estate Agents and we are a group of private investors that specialize in Owner Financing, Leasing, Buying, Fixing, Marketing, and Selling Houses.

We offer a unique Owner Finance program that will fit your needs. We will Owner Finance your home from you at an agreed price and terms. We will find a suitable buyer that we will qualify, to live in your home. When our buyer is ready to buy, we will help them get financing to buy your home. We will then buy the house from you and the new buyer will buy the house from us. Our price is higher than what we bought it from you. This is a WIN/WIN situation.


  • Build Equity every month

  • No long vacancies

  • Safer than conventional rentals, better quality tenants

  • No management headaches

  • Receive non-refundable down-payment

  • No Maintenance Costs or Repairs

  • Tax benefits

Why Don’t I Just List It With A Realtor?

It won’t hurt you to list your home unless it doesn’t sell. However, most real estate brokers simply just list the home on the MLS and hope to get a bite. The first problem with listing your home is that there are thousands of homes on the MLS. Realtors also have several other homes they are trying to sell as well. The second problem with listing your home with a Broker is that they don’t understand what Owner Finance is or they will say there isn’t enough money for a commission.

When we agree with you to Owner Finance your home from you, we take it seriously. We treat your home as if it was ours. We are constantly thinking of ways to move your house faster, so you can get on with your life.

                                      What If The Tenant/Buyer Tears Up My Home?

Well, there is no guarantee that a tenant won’t damage your property. But under our agreement, if that happened, we would repair it at our expense. Our goal is to find a buyer that will be able to qualify for a loan. It has been our experience that Lease-Option buyers treat the home as if it was their own, so damages are rarely a problem.

What about a Property Manager?

A property manager will charge you around 8-10% of the monthly rent. Sometimes you will need to follow up on property managers to make sure their doing their job. Anytime there are repairs needed, the property manager will call a repairman to fix the problem at your expense. Not only are you losing 8-10% every month but also you will be paying all repair costs.

                                      DUE DILIGENCE PERFORMED ON ALL BUYERS 
All transactions Close through a Title/Escrow Company or Attorney

The below Screening & Verification process is performed on all potential Rent, Lease, Lease with Option, or Owner Finance Buyers of Your Property:

*A completed credit application is done (approved by Mortgage Broker with the “Ability to Pay”)
*Copies of Driver’s License.

*Full name and date of birth for all occupants (including children).
*Social Security Number(s) for all adult occupants.
*Full Residence History for all adult occupants for the last 2-3 years, including: address, name of landlord(s), contact information for landlord(s), dates of residence and reason for leaving.
*Full Employment History for all adult occupants for the last 2-3 years, including: name of employer, contact information, tenant/buyer title, tenant/buyer supervisor and tenant’s income.
*Name and account number for Bank accounts (savings and checking).
*Two emergency contact numbers – must be two nearest relatives not living with the tenant and/or buyer. Get the Name, relationship, address and phone number. It’s best to get the name of parents when possible.
*Get the Tenant / Buyer written authorization to verify the information provided and to obtain a credit report or any other supplemental information that you might need in the approval process.
*Have the Tenant / Buyer pay to pull a credit report. Call this a “non-refundable application fee”.
*Screening includes a Verification and Validation of: SSN Validation, OFAC/Patriot Act Search, Evictions and Suits, Liens and Judgments, Bankruptcies, Criminal Records Search, Sex Offender Search, Collections, Social Security Death Index, FICO Score, Validate Applicant Identity, Name, Address, & SSN Name Match.
*The Tenant/Buyer will have substantial skin in the game with the Money Down through an Option Amount for a Lease Option or Down Payment with an Owner Finance situation. Enough for one to be quite comfortable and make it worthwhile if you had to take property back and do it all over again. Ask me how I know?
*Dodd Frank & Safe Act Compliant (If applicable)   

All Seller Financed transactions are closed by a Title Company, or a real estate Attorney, and are subject to the Dodd-Frank Act and the SAFE Act. A Residential Mortgage Loan Officers (RMLO) is used to approve the Buyers as if they were getting standard Bank loan, to prove that the Buyers do qualify for the seller financing, and have the “ATP” Ability to Pay for the Seller Financed loan. All Buyers must also pass our screening and background process as listed above. After you have all this information you as the Seller must approve of the Buyers as well. Always consult with your licensed CPA and/or your Attorney.

The possibilities are endless as there are Sellers and Buyers.