Option To Buy Archives


  1. For validation, does a Sandwich Lease Option rent payment to the home owner go into rent expense account? 
  2. I did a double close yesterday (close on the buy and immediately sell the property 10 mins later).  The video for showing the SELLING side is broken and I’ve sent an email to Melissa to see if it can be fixed.  I collected Non-refundable Earnest Money from the buyer weeks before closing.  Which account does this earnest money collected, for a house I don’t yet own, get put into?  The money went straight to my bank account.  When I am doing the closing, I assume that will be offset in the deposit split against the account in which the funds were associated with. 
  3. I’ve given Earnest Money to a seller for a property that was NOT purchased.  Would this go to the PAID TO OWNERS (expense) account or is there a better account for this?  Right now it is showing in the ESCROW (asset) account and needs to be swept to an account for which I never purchased the property.

Thanks Mike,



ANSWERS from Mike:

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Question from Lynn:

Mr. Butler: This is Gary J. and we are Gold Member clients of yours and I have an two quick questions.

Q1: First did I understand correctly that a non refundable lease option fee is not counted as income until consummation of the purchase????

A1: great question, but first, you have fallen victim to improper investor slang.
for starters, in my business there is no such thing as a “Lease Option Fee.”

This is actually TWO separate transactions involving what you are describing.

1 – anyone may purchase an “Option to Buy” on any property I own. This has absolutely nothing to do with rent or a lease. In fact, you could have a tenant occupied rental and you could allow an investor to purchase an “Option To Buy.” Click to Access Video or Read More