What Is It?
A lease purchase (also known as lease option contract) is a legal document that combines a basic lease contract with an option to purchase contract. The tenant/buyer pays to the landlord/seller a non-refundable option deposit that is applied to the purchase price of the home. The tenant/buyer then pays to the landlord/seller a sum that is typical to the rental amount usually on a monthly basis.
A portion of that monthly payment is then applied to the purchase price of the home. During, or at the end of the lease period, the tenant/buyer has exclusive right to but the home under the terms to which both parties have previously agreed.
Lease option is not a profit strategy. It is merely a financing structure which is only applicable to some rare situations like a need to do a reverse exchange.