l/o and rent at the same time ? - Posted by Mark (WV)

import · June 25, 2001, 10:15pm

Posted by Mark (WV) on June 26, 2001 at 10:03:30:

Thanks John boy thats about what I had came up with.Thanks for the reply
Mark

import · June 25, 2001, 10:15pm

Posted by Mark (WV) on June 25, 2001 at 22:15:59:

Maybe one for you to think about Johnboy.I’ve got a small house ,2/1 worth about 30k and have around 13.5k in it.Heres whats going on ,I have it rented on Sec. 8 at 310 per to a single mother with one child. This renter has a boy friend who wants to move in with her.He has asked to buy on L/O with her remaining on Sec 8.His idea is to pay and addional 275 per month with a 2 year op. to purchase at 30 k with the intire amount that he pays going towards purchase.A defaut would allow me to keep all money with no credit on the l/o.

Is this any where close to being legal ? I thought I had seen it all but maybe not yet.

Thanks for looking and for the replys
Mark

import · June 26, 2001, 8:16am

Re: l/o and rent at the same time ? - Posted by JohnBoy

Posted by JohnBoy on June 26, 2001 at 08:16:33:

I don’t do sec. 8 so I’m not up on any laws pertaining to them. As long as you can sell the property in two years then I wouldn’t see a problem with you selling someone else an option to buy it.

Rather than treat this guy as another tenant occupying the property, keep the option arrangement with him seperate from the current tenant.

I imagine you could just enter into an option agreement with the boyfriend seperately. You just sell him the OPTION to buy the property within two years for an option fee of $6,600…purchase price set at $30k. You agree to except the $6,600 in the form of payments in the amount of $275 per month with any option money paid to be deducted from the purchase price of $30k, IF, he exercises the option. Since you would be writing up the option agreement for $6,600, he would have to pay any balance of that owed if he were to exercise his option early. You would need to also include a clause in the option agreement that IF he exercises the option at any time, that he is purchasing the property subject to any existing lease that may be in effect at the time he exercises the option. This way you can sell the property to someone else without violating any lease agreement you currently have with a tenant. The new buyer would have to honor any lease agreement in effect until it expires if he exercises his option. This covers you with any lease you have with a tenant.

If he goes the full 24 months and exercises the option he would owe you $23,400 to buy the property. If those numbers work for you then I don’t see a problem with this.

Also, since this guy is just a boyfriend of the tenant and if he were to buy the property, he could probably continue renting to the girlfriend collecting from sec. 8.

I would run this by an attorney in your area to make sure everything is properly set up, but I don’t see a problem with selling an option to someone else as long as they understand they will be buying the property subject to any existing lease agreement that they would have to honor.