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Lease Option Deals can help a Buyer buy and a Seller sell.
"How large can a lease option be?"
It can be used for Residential or Commercial Properties. So the answer is the size can be infinite.
If the Buyer wants to buy on an option to purchase, he generally has a lease agreement along with an option to purchase, stating how long the time period of the option is, and what the Future Purchase Price is going to be. A Memorandum of Option can protect the option once recorded at the County Court House, thus clouding the title.
If the Seller wants to sell on an option to purchase, he generally offers a lease agreement along with an option to purchase, stating how long the time period of the option is, and what the Future Purchase Price (FPP) is going to be. The FPP can be tied to a Future Appraised Value, from an accredited appraiser. See http://en.wikipedia.org/wiki/Appraisal_Institute.
Seller getting a New Home Mortgage
If the former residence is now an Investment Rental Property, most mortgage brokers and direct lenders will accept 70% of the cash flow as income coming from the old residence (now an investment property), allowing the Seller to finance a new home mortgage. It is often possible to charge 2 payments, taxable rent income (say $600 per month) and an additional 30% as a non-refundable monthly option payment (non-taxable), to be subtracted from the Future Purchase Price if and when the option is exercised. This would effectively raise cash flow and enhance borrowing for the second home.
Non-Refundable Option Consideration
The "down payment" or option consideration should be at least 3% of fair market value and non-refundable to compensate the Seller for taking the property off of the market. The 3% Option Consideration can be offered in the form of a Promissory Note.
Taxation of Option Consideration
According to Internal Revenue Code (IRC) Section 1234, all option consideration monies received are considered NON-TAXABLE until the option is EXERCISED or EXPIRED.
Types of Properties
Most popular are Single Family Residences (SFRs); also Single Use Commercial Properties, Mobile Homes and Condos utilize Lease Options.
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Do factors like down payment and the security deposit that has to be paid upfront on an asset have a major influence on a lease or loan option?
Large down payments or security deposits will increase the net present value (NPV) of the loan or lease option. If either the lease or the loan requires a large security deposit or down payment, this will increase the NPV of that option making the other option more appealing. This is due to the devaluing of money over time. If a large down payment is required upfront, that amount of money is not devalued. Payments, as time goes by, are less valuable.
Difference between operating lease and finance leasing?
An operating lease does not transfer the risks and rewards to you (lessee) at the end of the lease period where a finance lease does. So in affect the operating lease can be thought of as renting the asset while a finance lease can be seen as a finance option to own the asset.
What the advantages of a lease option over a buy option?
The major advantage is to corporations who have separate accounts for capital expenditures (the buy option) and current bills (the lease option). The two have different tax, depreciation, etc., rules. A corporation might also choose to lease something like a car because it ensures they always have newish cars. If you buy a car you'll keep it for seven years and take a big hit when it comes to resale time. If you lease one, you make payments for three years then give it back.
What is the best way to find a house with a lease to purchase option?
Often, you can ask the owner of a home you are interested in purchasing if a lease is an option. If the owner is interested in leasing the home, you should have a real estate professional draw up the contract.
Buying a leased house?
You can still do a lease-option deal, as long as the landlord is willing.
Do factors like down payment and the security deposit that has to be paid upfront on an asset have a major influence on a lease or loan option?
Large down payments or security deposits will increase the net present value (NPV) of the loan or lease option. If either the lease or the loan requires a large security deposit or down payment, this will increase the NPV of that option making the other option more appealing. This is due to the devaluing of money over time. If a large down payment is required upfront, that amount of money is not devalued. Payments, as time goes by, are less valuable.
When a lease contract is over you have 5 years option lease can a landlord refuse to sign option lease?
If you can rephrase this question, it might help to get an answer. Thank you. www.retustee.com
Can a landlord evict you if you signed a lease option to purchase?
That it is a "lease - with an option to purchase" makes no difference. You would be subject to eviction like any lease tennant, the same as if it didn't have an option. (Agreeably , you MAY still have the option to exercise your right to purchase rather than move, if you are able to perform as required by the Option agreement. It is also possible, and said in most contracts, that breeching the lease eliminates the Option).
How Lease option tractor trailer is it good?
Most Lease/Purchase programmes are not....
If lease with option to purchase been foreclosure on what happens?
Sorry, the question is totally unclear. Do you want to buy a foreclosed property that had been lease optioned -OR- is it your lease-optioned property that is in foreclosure? Are you the property owner or are you the person trying to buy it via lease-option? Please re-word the question and re-submit it.
For a high-technology item like computer equipment is the lease option preferable from the very outset Why or why not?
"For a high-technology item like computer equipment is the lease option preferable from the very outset Why or why not?"
Which American companies lease laptops?
Most computer outlets have a lease option for their products. There are also computer and office supply vendors that lease a variety of equipment to consumers and businesses.
Where can you obtain lease option forms?
Lease option forms can be found and printed from rocketlawyer, lawdepot, web crawler, biztree, uslegalforms, and findlegalforms. Lawyer offices courthouses near you may also carry them.
Who do you contact for lease option forms?
You can get downloadable lease option forms online. You can just purchase and download them as needed. Or you can contact an attorney to draw one up for you. Also realtors have access to basic forms.
What are the release dates for The A-Team - 1983 Lease with an Option to Die - 4.4?
The A-Team - 1983 Lease with an Option to Die - 4.4 was released on: USA: 22 October 1985 Netherlands: 6 January 1986
Difference between operating lease and finance leasing?
An operating lease does not transfer the risks and rewards to you (lessee) at the end of the lease period where a finance lease does. So in affect the operating lease can be thought of as renting the asset while a finance lease can be seen as a finance option to own the asset.
What the advantages of a lease option over a buy option?
The major advantage is to corporations who have separate accounts for capital expenditures (the buy option) and current bills (the lease option). The two have different tax, depreciation, etc., rules. A corporation might also choose to lease something like a car because it ensures they always have newish cars. If you buy a car you'll keep it for seven years and take a big hit when it comes to resale time. If you lease one, you make payments for three years then give it back.
