There have been a lot of people requesting more information on the lease option law that was passed recently here in Texas. For the people (like me) that like to understand all the details of everything you can read Bryan Dunklin’s Commentary
and Steve Tiemann’s Commentary.
For the rest of you, here is the net effect.
Do Not Do Lease Options in Texas.
That is it. There are a lot of other options available to you to sell property, but if you decide to do a lease with an option on a property and have a disagreement with the tenant – you will likely lose the home and maybe more. If you lease-option the house with any financing tied to it – you are breaking the law.
Our solution is to sell our properties on owner financing and wrap the mortgage. The downside of this is that you have to foreclose on the property if you stop getting paid. The upside is that (1) it is legal and (2) the foreclosure process in Texas is fairly quick.