The absolute biggest fear new rent to own or lease purchase investors have is what happens if the tenants don’t exercise the option and buy the property? Well, you have to remember that the tenant has the “option” to buy the property, they don’t have to buy it.
If you think about it, the rent to own investor is still in a good position. If the tenants decide they don’t want the property after all you must remember that the option payment or payments that they made are non-refundable. The investor has that money free and clear.
Also, if the lease purchase investor did things the right way, they negotiated their lease with the original seller for a longer term than the tenants. The investor still has time to find new tenants or buyers for the property.
Remember that the property has probably increased in value as well, which means higher sale price, higher rent and a larger option payment.
If the second tenant decides they don’t want to exercise their option you can do the same thing again, finding a third tenant and negotiating the rent, sale price, and option payment.
Sometimes you cannot make a deal happen and after the third tenant decides not to exercise their option. If this happens you can give the property back to the original seller, remember, you had the option to buy the property you don’t have to actually buy it. You could go back to the seller and negotiate for more time or you could also go ahead a buy it outright. You have enough money for a large down payment and a traditional loan so that could be an option as well.
The seller won’t be angry because you gave him monthly payments and you gave him back a property that is worth more than when the agreement was made which means quite a bit more equity.
