How to Protect Yourself in a LeaseOption Deal

If you want this property in your IRA, keep in mind that you personally cannot use it. If it's a retail or office space, you can't put your business in the property. IRA rules prohibit use of the property by you and your family.

You need assurance the mortgage will be paid during the term of your lease option. Everything needs to be in writing. No handshakes. You want the right to sell the property, as well as the right to assign your lease option to another party. I recently was offered $1 million by an investor to assign a purchase contract I had on an apartment building.

Lease options have been around for a long time and standard contracts are available. Get one and read it carefully. I'm always surprised by how many people do not read the entire contract. Ultimately, the best way to protect yourself is to know what you're getting into.