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The Lease Purchase Option Period would be for 2 years.
At the end of the 2 years, the Buyer would be responsible for coming up with
their own conventional financing to conclude the Sales Transaction.
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During the Lease period, the Owner would be responsible for
taxes, homeowner insurance, Condo Association fees, etc. Lessee would be responsible for
contracting their own Rentors Insurance for their personal belongings and
liabilities.
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During the Lease period, the Owner would be responsible for
Major Maintenance issues such as Heating and Cooling, Breaks in the
Plumbing, Major Structural Damage. Tenant would be responsible for
minor maintenance such as stopped up toilet, sinks, broken windows, damaged
walls or doors, lighting issues/bulbs, and appliance repair or replacement.
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Tenant pays all utilities (puts utilities in their own name)
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Tenant CAN Sublet the Unit.
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Since the Tenant has a Purchase option in place, Tenant will
have permission to market property for sale at higher price, understanding
that Purchase Option is exercised at time of sale, and payment fulfilled prior
to title passing on. Tenant pockets the profit difference in such an
event.
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Monthly Lease Payments would be set at $800
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There would be an equal $800 Refundable Security Deposit
required.
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The Non Refundable Purchase Option Price would be $3000.
This amount would be applied to the Sale at the time the Purchase Option is
exercised.
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The Lessee would receive a $300 Rent Credit towards the
Purchase
- on each monthly Lease Payment made leading up to the actual Purchase during the 2
Year option period.
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At the time of a Successful Purchase Transaction, the Buyer
would have earned towards down payment the following amounts: The
Security Deposit ($850 in this scenario) + the Initial Purchase Option
Amount ($3000 in this scenario) + $300 of each rent payment already
made. ($7,200 in this scenario assuming all rent was paid during the
24 month option period). That is a total of $11,000 of earned
down payment monies that can be applied to the purchase. (again,
assuming this exact scenario - these are example calculations).
Again, the above are parameters are simply guidelines, and
are based on a relatively firm purchase price to what the Unit is currently
being sold for: $89,000 (which has already been reduced quite
substantially due to the economic factors). But everyone's situation is different,
and the owner is open to customization of the details. There
are great benefits to both parties in this situation.
The Seller/Landlord is getting a Tenant that is working towards
purchasing the property, and thereby is more apt to take good care of the
property.
The Buyer/Tenant is building towards a substantial down
payment with generous monthly payments being applied towards purchase price
equity, achieves the goal of immediate owner benefits, but doesn't lock themselves
into immediate legal obligation of Ownership, Taxes, Homeowner Fees, etc...
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