A "lease purchase (or lease option)" is the abbreviated form of the appropriate term "lease with option to
purchase." Simply stated, a Lease 2 Purchase contract combines a basic lease contract with an option to
purchase contract, which creates a Lease 2 Purchase contract.

A few misguided advocates believe that a lease purchase contract combines a lease agreement with a
purchase agreement, thus requiring the tenant to purchase the home at the end of the lease. Don't be
fooled; this is old-school and is almost never used in todays real estate market.

Before I describe what a Lease 2 Purchase contract is in detail, I must first define a few simple basics for you.

What is a contract?

A contract is an agreement between two or more persons (individuals, businesses, organizations, or
government agencies) to do, or to refrain from doing, a particular thing in exchange for something of value.

What are the key elements to a binding real estate contract?

Offer and acceptance: Original signatures with no alterations to the contract. If the original offer is marked up
and initialed by the party receiving it, then signed, this is not an offer and acceptance but a counter-offer.
Any final agreement should be reduced to a final writing and signed by both parties.
Consideration: A bargained for exchange of something of value. Money is the most common form of
consideration, but a promise to perform (i.e. a promise to pay) is also satisfactory.

In writing: A real estate contract must be in writing and it must:

Identify the parties: The full name of the parties must be on the contract.
Identify the property: At least the address, but preferably the legal description must be on the contract.
Purchase price: The amount of the sales price or a reasonably ascertainable figure (an appraisal to be
completed at a future date) must be on the contract.
Signatures: A real estate contract must be signed to be enforceable.
Legal purpose: The contract is void if it calls for illegal action.
Competent parties: Minors, mentally impaired, drugged persons, etc. cannot enter into a contract.
Meeting of the minds: Each side must be clear as to the essential details, rights, and obligations of the
contract.
What is a Lease contract?

A lease contract is an agreement, usually written, between the owner of a property and a renter who desires
to have temporary possession of the property. As a minimum, the agreement identifies the parties, the
property, the term of the rental, and the amount of rent for the term.

In addition to the basics of a rental (who, what, when, how much), a housing rental may go into much more
detail on these and other issues.

What is an Option contract?

An option contract is defined as "a promise which meets the requirements for the formation of a contract and
limits the promisor's power to revoke an offer."

Or, quite simply, an option contract is a type of contract that protects the individual making the offer (the
offeree) from a seller's (the offeror) ability to revoke the contract.

What is a Lease 2 Purchase Contract?

Again, it's very easy. A Lease 2 Purchase contract combines a basic lease contract with an option to
purchase contract, which creates a Lease 2 Purchase contract.


The tenant/buyer pays to the landlord/seller a nonrefundable option deposit that is applied to the purchase
price of the home. The tenant/buyer then pays to the landlord/seller rent to compensate the landlord/seller
for the tenant/buyer's use of the property.

Rent payments are usually made on a monthly basis. A portion of that monthly payment is often applied to
the purchase price and/or the down payment of the home.

During the term of the lease, but before the option expires, the tenant/buyer has exclusive right to buy the
home under the terms to which both parties have previously agreed.

Here are some features and benefits for the tenant/buyer:

Faster equity growth: Equity accumulates much faster (five times or more!) than with conventional financing
through a bank or lender.

Rent money is working towards purchase: Every month a portion of your rental payment (typically
$100-$500) is credited towards your down payment or off of the sales price.

Option money is credited towards purchase: When you sign a Lease 2 Purchase contract, you will pay the
seller an option deposit. This money is your vested interest in the home and will be fully (100%) credited to
you when you buy the home.

Minimum cash out of pocket: When you purchase a home the conventional way, you must pay at least 5%
down plus closing costs and prepaid fees. When you buy with a Lease 2 Purchase, you only pay first month's
rent and a small option deposit. This will save you between 25% and 85% every time you buy a home.

Frequently no down payment at close: Since you have given the seller an option deposit and you have been
receiving monthly rent credits, there will frequently be very little or nothing left to pay for a down payment at
closing.

Profits from appreciation: Since the sales price is locked in before closing (as specified in your agreement),
any increase in property value will mean that your equity (what you owe minus what it's worth) is increasing in
the home.

Possible sale for a profit: If you are allowed to sell (assign) your option (it will be in your agreement), you may
sell it to a third party for a profit.

Increased buying power: When you buy a Lease 2 Purchase home, you can put down as little as first month's
rent and a $1 option deposit. Compare that to a typical bank or lender who requires 5-30% down plus closing
costs and prepaids.

Credit problems okay: Qualification restrictions simply do not exist. You will be approved at the sole
discretion of the landlord/seller.

No lengthy escrows or mortgage approvals: Your approval will be based solely at the discretion of the
landlord/seller instead of a lender who can take up to a month (or longer) to render a decision.
Control of the home: You will be put in full legal control of the home for a specified period of time without
actually having to own it.

No taxes, less liability: Since you do not own the home (yet), you will not have to pay property taxes and your
liability exposure will be dramatically reduced.

Quick move in time: You can typically take possession of the home in a week or less, instead of conventional
move in times of one to three months, after your offer was accepted.

Maximum leverage: You are spending very little (or zero) money to control a potentially very expensive, and
very profitable, piece of real estate.

Time: Before you actually buy the home, you will have 3-24 months (depending on your agreement) to repair
your credit, find the best interest rates, investigate the home and research the neighborhood and/or schools.
Minimal maintenance: Large maintenance problems or any maintenance problems that exceed a certain
amount of money can be delegated to the landlord/seller.

Privacy: Your name will not be on the deed or in the public records until you exercise your option to buy.
Peace of mind: You will have full control of the home and can maintain or improve it however you wish.
Alpha Dog Investments
Call us TODAY!
678-667-0033
ALPHA DOG INVESTMENTS LLC  /  1353 Riverstone Parkway  /  Suite 110-228  /  Canton  /  GA  /  30114
678-667-0033 Phone  /  678-667-7971 Fax  /  alphadoginvestments@gmail.com

Sandra Watkins (Member of Alpha Dog Investments LLC is a licensed Real Estate Agent in the State of Georgia
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