do these numbers work?

There is no issue with banks.

With the Lease option, in its simplest form: you are renting the property out and giving the tennant the opportunity to buy it.

The conditions can be as creative as you like. The term can be as varied as you like, the price can be predetermined, based on future valuation, based on CPI or whatever.

Cheers,

Batts

Hi, Dr X

I talked to a person did wraps before. He said some banks allowed but some not. These are the bank’s asset until you paid off your loan. If there is a legal loophole in it, you could be well caught into it by the clever tenants.

Hey all,
Great comments and brain strain!

You have to remember that the $44,400 credited back in 5 years will be more than enough to secure the deal as proeprty prices will have possibly nearly doubled so the security that the bank holds will be already in excess of say 50% of LVR…. any bank would lend on this. – based on the fact that proeprty in SYDNEY have doubled every 5-7 years.
I would be even more generous:
Perhaps offer a $50,000 bonus at the 60th payment if they go ahead and purchase. increathe strike price to $400,000 – $450,000 and you get an instant win-win situation… they get $94,400 equity to apply tothe house purchase…and you get profit in the following ways:

1. Upfront $7,400 (tax Free)-as it is an option and you may have to pay it pack to the tennant.
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2. Nett profit weekly from your outgoings to the weekly income coming in.
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3. end profit from purchase; Bank writes out a cheque for $355,600 ($450K – $94,400 rent credit)
you pay out your remaining loan and keep the rest!

Sounds like a good plan to me!
Cheers
Kiwi