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Lease Purchase Option

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RCiancia

Member
What is the name of your state? FLorida

Hello, I own a house in northern Florida , which I currently live in. I have also just bought a second house which I will move into shortly. Given the slow real estate market the sale of my first home has been slow, so I decided I want to become a real estate investor and rent it with a lease purchase option. This will get me top dollar with the option to get the house back if my renter/buyer backs out.

Question: Would it be wise to create a LLC company and transfer the house to it, so I can avoid personal liability? Also, would I love the tax advantage if I do this? I need some advice. I found a suitable renter/buyer who I am in the process of screening, background checks, credit report, etc, so I am close to a deal. Any info is appreciated.

Regards
Ron
 


FarmerJ

Senior Member
If your going to go the rent to own route dont waste any time in contacting a real estate atty to talk to about preparing for you a contract that has no holes in it spelling out both tenant /buyer and landlord tenant rules addressing issues from insurance to repairs to the home and timelines for expiration of the agreements, breaches of the contract by either party etc. This is your home so you have alot to risk if you decide to attempt to do this on your own without the help of a atty. Infact look thru old postings , you will see there are indeed people who got bit pretty bad due to home made contracts. Go to the links up top and locate a real estate atty to advise you and draw up your contracts if you go this route.
 

RCiancia

Member
Thank you, I do have an attorney, so all that is covered. Do you think its wise to create a LLC corporation and accept rent payments under that ? I want to be protected personally just in case

thanks
Ron
 

LindaP777

Senior Member
Is there a mortgage on the house? Transfereing the property to an LLC could trigger a "due on sale" clause.
IMHO, you don't need an LLC if you're just going to have just the one property. If you want to protect yourself, call your insurance company and get additional insurance coverage, especially auto. You can get a million dollar policy for a couple hundred a year. If someone (God forbid) dies due to your negligence, it will more than likely be from an auto accident.
 
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