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No. of Recommendations: 0
Nothing convoluted about this problem. You are screwed, plain and simple. If your financial situation says sell, then sell. Period. Get rid of the drain.

If you can afford to carry the burden, then why give away the store? Your lease option plan sounds promising. But do it differently.

You are looking for a buyer who really wants to get out of rent, but has had credit/income/job problems in the recent past that prevent him from purchasing a home.

So charge him a nonrefundable option fee of - say - 2 to 3 percent of the purchase price. If he does not exercise the option, you keep the fee. If he does exercise the option, you apply the fee to the down payment. If you do this, MAKE SURE that your lease document and your option document are SEPARATE DOCUMENTS. Also, take some modest portion of the option fee, and credit it as a DEPOSIT on the LEASE.

If you have to evict him, when you get to court you could be in trouble if you don't do this - some courts have held that your non-refundable option fee is really a deposit. This could force you to return part of it, even if you evict. By separating the documents, you can present the LEASE (showing a deposit) to the court, but not the option document. If the tenant does not show up in court, then you have no trouble, and if he does, unless he brought his copy of the option document (he won't since you have labeled it a nonrefundable fee) you still have no trouble.

Returning to the option plan, you rent him the place for - say - 20% above market and credit ONLY that 20% toward his down payment - and then ONLY IF the payment is received on time. If it is late, not only does he owe late fees, but the 20% for that month does not go to the down payment.

You are indicating a certain amount of financial distress in your post; don't communicate that distress to any would be tenant/buyer. If you do, you give up your leverage, and your goal is to make the best deal you can to get shut of your problem.
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