Owners of hard-to-sell real estate generally offer leases. They sell it to a conventional buyer who would pay the seller a cash payment if the property was a plum and easy to sell. Sellers usually get market value at today`s prices and pocket relief for the payment of the mortgage on a free property for the duration. Separate document instructions are required for each individual property. Property management contract (1) day (date) at which we must start management. (2) Month and year, you want us to have the management (3) of “questions”, high rental price (4) the lowest… Thank you for all the answers! Is there anyone using this strategy? @Jenifer Levini do you currently have open contracts that are used in California for an option-to-purchase lease? Step 12 – The second part defines the terms of the lease. Enter the day, month and year in which the lease takes effect, how long the lease remains in effect (i.e. 5 years) and the day, month and year in which the lease ends. The property could be burdened by underlying credits that contain disposal clauses, giving the lender the right to expedite the credit if the owner enters into such an agreement. Keep in mind that this is exactly what a call option is – an option. The details of when and what happens when the tenant decides to either switch to the buyer or remain a tenant must be described in such an agreement and both parties must be in full compliance with all conditions at the time of signing. Conversely, a call option must also contain the results if the tenant decides not to become a buyer.

After all, they will have put a lot of money into an amount that would be spent on the purchase. The details of what happens to this money if the call option is declined must be defined. Of course, it is a good idea for both parties to understand the conditions they will approve by signing. This document is considered by a California court as a legally binding contract and should therefore be taken very seriously by both parties. IMHO, a lease and a ROFR are the safest for the investor and seller. A lease purchase is another variant of the same theme with some slight differences. The buyer (tenant) pays the seller (the owner) the option money for the subsequent right of sale, and he accepts a purchase price – often or slightly higher than the current market value. For the duration of the option, the buyer agrees to lease the property by the seller for a predetermined rental amount. There is nothing wrong with an OTB and a lease (option to buy). Sometimes sellers give the option of money to their real estate agent as the full payment of the commission. Brokers are not always involved in exercising leasing options or executing leasing contracts, and you will probably still need a real estate lawyer, even if you have retained the representation of the real estate agent.