QUESTION:
What happens if the home value drops while the T/B in under a rent to own contract?

Example:
Strike Price – $100,000
2 year lease option
$1000/month

At the end of 2 years the house depreciates from $100,000 to $85,000.
What can the T/B and homeowner do to solve this problem?
ANSWER:

The only thing you can do in a situation like that is drop the sale price, or work something out with the tenant/buyer to carry a second note for the difference. In that case the tenant/buyer probably wouldn’t be happy, but someone would have to make a compromise.
Adam