Need help with rent to own situation?

I have renters in the house I own that are interested in doing a rent to own kind of situation. I am ALL for this but I don't know where to begin. I understand mostly how it works, but what kinds of steps should I take to get started with this?Need help with rent to own situation?
First thing you need is a real estate Atty who will protect you in this situation. Skip that part and you end up in a night mare. Second thing is that if you have a mortgage on the property will they call the entire note due if you try and do a wrap mortgage on them.Need help with rent to own situation?
First step is to do a credit check. A lot of times they are doing a rent to own because they don't have good credit but look at the history. If they display zero ability to ever pay anything on time then I wouldn't let them do a lease purchase with me. For example, if they are in the 400's walk away.


Second, make sure you collect a large enough down payment that will get credited to them at closing. It has to be large enough that they won't just leave in the middle of the night. One month rent won't cut it. Typical lease purchase in TN is 3-5K.


Third, as someone else mentioned...don't do a multi year lease purchase. Most lease purchases are between 6-12 months. If they can't obtain financing in a year they aren't trying.


Hope this was helpful.
I would be careful in locking in a certain price first of all - if the market goes up, you will lose, and if the market goes down, they will just walk away. Either way, you will probably lose.





What I would suggest is to say that you will give them credit. Like: $100 per month towards the purchase of the home, and will discount the home 2-4% for each year that they rent of the fair market value at the time of purchase.





If they rent for 5 years, that's $6000 towards closing costs, and a 10-20% discount in fair market. If your home still went up 30-40%, you still win, and they buyers still win.





Just a suggestion - anything else, and you need to consider your win/lose scenarios.
I'd start with a good real estate lawyer who can draw up the contract for deed and maybe check the reference of the buyers and their ability to pay.