Seller financeing or Lease option? - Posted by billibob

Posted by Ken on May 10, 2002 at 20:54:59:

In my opinion it’s always better to purchase on contract because you have more control than if you “purchase” on L/O. When you purchase on contract (seller financing) you immediately get an equitable interest in the property and you get the tax benefits of ownership. Not so when you purchase on L/O.

On the other side of things, I feel it’s always better to then sell to your tenant buyer on L/O because, again, YOU still have more control in terms of ownership than if you were to sell to them on contract.
This way you’ve positioned yourself to have the best control over both aspects of the transaction. Not to mention the fact that you can evict them if they default (rather than foreclose since that takes a MUCH longer time). Don’t forget to check with attorneys to guage the legal environment in your area so as to know whether to make the lease and option separate from one another.

I know there are people on this forum who do “sandwich leases” (they buy and sell on L/O) and they may tell you differently, but I do it the other way.

Best of luck,


Seller financeing or Lease option? - Posted by billibob

Posted by billibob on May 10, 2002 at 18:04:57:

What are the advantages of buying this house on contract with seller financing, verses getting it with a lease option. I’ll take over the payments of $1050 at $125,000 selling price, seller pays me $200 a month for 24 months to take it off his hands. Or I could L/O it same terms.
Which is better?
I will then lease option it for $139,900 with payments of $1350/mo and $5-10,000 down deposit.