Tenant-buyer wants 18 months when my bridge matures in 10

They asked to finish the basement in month zero. By month six it'll be the kitchen backsplash, and by month twelve they'll be asking for a credit for the improvements they made to your house. That's the scope creep pattern and it doesn't care that this is a lease instead of a job.

Separate point. Your strike is $335,000 against appraisals at $293,000 and $297,000. In 18 months that needs about 8% of growth to appraise, and if it doesn't, their lender won't fund and they walk or you renegotiate from a weak position. I'd rather see $319,000 with a bigger fee than $335,000 that can't clear an appraisal.

So what happens if they don't exercise at month 18, what's your position? You've kept $12,000, you kept $7,200 of credits that never got paid out, you've had 18 months of rent covering carry, and you own a house that's 18 months older in a market you can't predict. That's not a disaster. It might be better than the $288,000 you're trying to talk yourself out of.

So which branch are you actually underwriting? Reading the post it sounds like you're underwriting the sale and treating the non-exercise as the failure case, and harrow's appraisal point suggests non-exercise is the likelier one.

Your transfer clause question isn't answerable from here, and I'd stop reading it yourself. Send the executed loan documents to a real estate attorney and ask the specific question: does granting an option to purchase, or recording a memorandum of it, constitute a transfer or encumbrance under section whatever. How that language gets applied depends on the document and on state law, and lenders differ on whether they care.

The mechanism to understand: many notes treat a conveyance of any interest in the property, including some option grants, as triggering the transfer provision, and long leases sometimes get called out separately. Some lenders will consent in writing if you ask. Asking is free and it's a lot cheaper than finding out at maturity. Get the consent in writing, and confirm current terms directly with whoever you're refinancing into rather than assuming the rental product will tolerate an 18 month option, because underwriting guidelines on that vary by lender and change.

And price the refinance now. You said you haven't. Your $350 a month of spread is a rounding error against a payment increase, and the whole lease option only works if the takeout loan payment fits under $2,450 minus taxes, insurance, and something for maintenance.

Still learning this side, so a question. If the couple can't qualify at month 18 but somebody else can, can keystone just sell the option to a different buyer, or is the option something only they hold? I've been reading about notes and I keep assuming everything is transferable, which I'm starting to think is wrong.

The part I do follow is tender's point about the payment. $350 of spread against an unknown refinance payment is not really a spread yet.