Sandwich Lease Options Are Hot!

And by hot, I mean in more ways than one.  If “greed is good”, then Sandwich Lease Options are Sexy! They’re a great tool in this dynamic real estate market. What do I mean when I say Sandwich lease options are sexy?  I mean in a way that makes everyone in the deal feel good about themselves and the other people involved. I’ve always said that sandwich lease options are win-win-win deals for everyone involved, which is why I think they have so much appeal.

Something for Everyone!

Do you think of hot or sexy as being very exciting, attractive, and alluring? A successful sandwich lease option is all of that and more! It’s about negotiations that put a smile on the homeowner’s face, a smile on the buyer’s face, and on the investor’s face (yours).

What homeowners find exciting about sandwich lease options:

  • Sandwich lease option professionals (you) manage the process for them.
  • The seller needs cash right away, without waiting for a sale.
  • They can move out on very short notice.
  • Little or no maintenance and repairs required.
  • A solution when they can no longer afford the house.
  • The seller doesn’t have enough equity to pay a realtor commission.
  • The seller wants a fast solution rather than foreclosure.
  • Recently married with the bride and groom both previously owning a home.
  • Built or bought a new home without selling their previous home.
  • Inherited a house in another city or the person has no need for the inherited house.
  • Landlords that are burned out from dealing with calls about a plugged kitchen sink on Sunday morning from tenants who never pay the rent on time.
  • Landlords that are ready to retire.
  • Vacation homes that are not used or the owner retired to it and has a vacant first home back in the city.
  • Seller wants to keep the tax deductions until the sale.
  • And many, many more…

What tenant/buyers find attractive about sandwich lease options:

  • They don’t need a full down payment.
  • Monthly rent credit might apply towards the down payment.
  • They want time to build their credit to get a better interest rate on their loan.
  • They have ample income but not enough documentation for banks.
  • Pre-arranged sales price.
  • They want to live in a home for a while before they commit to buying it.
  • They want the ability to save money long-term before purchasing a home.
  • They have few, if any, other options.
  • You’ll learn more reasons simply by asking when they call you.

What investors find sexy about sandwich lease options:

  • Low or no-cost investment.
  • Low or no risk.
  • Control the property for very little cash.
  • Helping buyers and sellers find solutions to their problems.
  • Easy to understand and execute.
  • Top dollar option prices in today’s tight market.
  • Three paydays – option fee, monthly rent, final sale.
  • Strong demand from prospective buyers.
  • Plenty of sellers when you know where to look.
  • Maintenance and repair responsibilities almost always belong to either the seller or buyer.
  • Rents must be paid on time to apply a small percentage to the down payment.
  • There are plenty of quick-closing deals out there right now.

Here’s the thing – sellers and buyers who would be attracted to sandwich lease options often don’t even know these are a possibility. They certainly don’t know how to put a win-win-win deal together. That’s where you come in as the sandwich lease options expert.

What’s Better Than a Low Cost and Low Maintenance?

Real estate investing comes in more strategies than only buying, renting, fixing, and flipping. Those options tend to be high-maintenance. Problems come up at the worst times. Landlords have to make emergency repairs. Contractors have to be managed. There are accounting problems. And there are many other reasons you don’t want all of the responsibility that comes with being the owner.

Sandwich lease options are a great alternative to more traditional strategies. Sandwich lease options are a low cost, low-maintenance, low hassle way for you to find interested buyers before you even own the property that you’re going to sell.

Traditional landlords have three big fears (risks) that sandwich lease option landlords avoid or at least minimize.

  1. A vacant rental when the landlord has a mortgage to pay is a big fear and risk.
  2. Maintenance and repairs are big costs for traditional landlords.
  3. Property damage is still another big cost and fear that traditional landlords face.

This is where it gets really good, because these are NOT fears and costs with sandwich lease options. The little bit of management time you do put in is mostly done upfront to put the deal together. Sandwich lease options are NOT about cleaning out rain gutters and fixing a broken water heater. A properly written agreement makes the tenant responsible for many major and all minor maintenance as the future owner of the home. The few repairs tenants are not responsible for go back to the homeowner. As the sandwich lease option investor, you have control but very little responsibility for maintenance and repairs.

What I Want for You!

If you are willing to learn, I can show you the way. But you have to be committed to the process. You’ll have it a lot easier though and here’s why! Throughout my years in real estate, I’ve made many mistakes, I admit, but one of the many benefits of making a mistake is it becomes a teaching moment for you.

When it comes to sandwich lease options, you need to think like the people you are trying to attract to your business. When you are looking for people willing to sell on a lease option, you think about the issues these people are trying to solve and what solutions you can bring to the table. The same thing is true when you are looking for buyers. What problems are they having and what solution are you offering? There is nothing better than a win-win-win solution for everyone involved.

I don’t want to see you make the same simple (and sometimes costly) mistakes I made when I was getting started. If you are ready to get started investing in real estate with sandwich lease options and begin closing deals in the next 30 days, you’ll need the right courses and contracts.

So how do you become a sandwich lease options expert? Well, I’ve laid out a plan that has been proven to work for almost anyone:

  1. You learn the basics: Investing In Real Estate With Lease Options.
  2. Next are the details: Buying and Selling with Lease Options.
  3. Create your Wealth Building Arsenal.
  4. Personalized Coaching.

Being a top-performing expert in sandwich lease options means knowing all of the possible ways that are available. As you uncover unique situations, you need other specialized tools and methods that include:

  1. Cooperative Lease Options.
  2. Get the Deed “Subject To.”
  3. Working with Realtors.

These are the exact actions you need to take today. I can’t wait to hear about your first deal!

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

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What did you think of this article? Please leave a comment below.

How to Sell “Rent to Own Properties” to Millennials in 2020

The bullish millennial real estate market continues roaring forward this year! If you have the right house, this is still a great time to sell in a few short months. So why would you instead consider selling using the “rent to own properties” technique? Why not just take your profit and move on to the next deal?

Because there is a more profitable answer… The Millennial Answer!

Why Rent to Own Properties Works So Well With Millennials

After years and years of this seller’s market, there are fewer and fewer houses available for sale. This is very much about the millennial generation… the most active demographic in today’s real estate market. Millennials (80 million of them) now out number baby boomers by almost 10 million people. And the millennials are much more active in the real estate market than baby boomers who are going into retirement.

The few houses out there for sale are attracting the most qualified buyers. These are millennial buyers who are already prequalified for a mortgage. But there is an even larger pool of millennials who would be buyers if they had a little help qualifying for a mortgage. Buyers who are eager to pay top dollar if someone will give them a chance.

Rent to own properties is all about helping these people qualify for a mortgage. These are the same people that house flippers are ignoring. And landlords raise the rent every year, which further motivates these people to want to buy a home. Offering millennials exactly what they want is the niche that you fill with rent to own properties.

Millions of millennials want to be served by this niche but very few investors are filling the need….

Rent to Own Properties is an Investor’s Niche

There are many reasons why rent to own properties is a powerful tool in this strong seller’s market. These reasons apply to both sellers and buyers alike. Near (or at the top) of the list is that investors (sellers) do better when they have a niche that they serve. A niche is more refined than just having an investing strategy. Buying and flipping houses is a strategy where countless investors compete (often successfully). Being a landlord is the most common “buy and hold” strategy. Again, a successful strategy but a very competitive strategy that doesn’t offer investors much of a way to separate themselves from the rest of the investing herd.

Niche investing is about becoming an expert in an area where there are very few competitors but where buyers willingly pay top dollar for the benefit of what an expert offers.

Selling “Rent to Own Properties” to millennials in today’s market is a powerful niche!

The Millennial Predicament

Consider where millennials are currently at in their lives (ages 24 to 39). When these people graduated from college and high school, it was the middle of the Great Recession. They faced two enormous financial hurdles. First, they could not find a decent paying job. Second, they were carrying the burden of college debt. Little wonder this generation has struggled to save a down payment and qualify for a mortgage. Yet, this is the biggest demographic in today’s real estate market and will remain so for many years to come.

In their early adult years, these people had a preference for living in the inner city near entertainment venues and restaurants. Today, they have matured and have good-paying careers. Many (if not most) are having families and becoming more financially responsible. Building equity in a single-family home in the suburbs is now more appealing than sharing an apartment with roommates with a trendy bar on every street corner. Millennials are now your target demographic for the rent to own properties niche!

Rent to Own Properties is a Perfect Fit for the Millennial Niche

What you have today are tens of millions of millennials living in city apartments where rents are increasing. They have good jobs but very little savings and haven’t qualified for a mortgage. They no longer want to pay high rents to landlords, and the few single-family homes on the market are being scooped up by the scarce millennials who do qualify for a mortgage.

Into the picture steps the “rent to own” niche expert with a solution to all their problems. Solutions these millennials are willing to pay top dollar for. You can get them into a single-family home out in the suburbs. For the cost of a rental deposit on a bigger apartment, they can put a deposit on a lease with an option to purchase. This works both towards the down payment they need and converts into the homeowner equity they want, as soon as they complete the purchase. You offer them a way to improve their credit score to qualify for a mortgage. And it comes with a white-picket-fence-home to raise their family. Having all the right solutions is highly profitable for a niche expert.

Who would have thought that “Rent to Own Properties” offers all of the solutions to the largest demographic in the tight real estate market of the 2020s? … only a niche expert!

So how do you become a rent to own properties expert? Well, there’s a sequence to becoming an expert at almost anything:

  1. You learn the basics: Investing In Real Estate With Lease Options.
  2. Next are the details: Buying and Selling with Lease Options.
  3. Create your Wealth Building Arsenal.
  4. Personalized Coaching.

Lease options are definitely my students and my own most profitable and least risky investing strategy. Real estate investing is all about finding creative solutions that work for you and others. What you need to do now is TAKE ACTION!

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.

What did you think of this article? Please leave a comment below.

Cash Out or Reinvest – Consider a 1031 Exchange

Your real estate business can grow from very small and humble beginnings to an unlimited size and source of income. The key to that growth is deciding what action you will take when the time comes to cash out or reinvest. I share and teach the most profitable investment methods that I’ve mastered in my many years as a successful investor. Among these methods are:

Every one of these is proven to help you run and grow your business. As your business prospers, a time comes to cash out or reinvest your profits. In this previous post, I shared with you some important factors you want to consider when making this important decision.

This cash out or reinvest post is about how you can minimize the taxes owed on your profits using the IRS 1031 Exchange.

Avoid Paying Capital Gains with a 1031 Exchange

Every investor should know about the IRS tax code 1031 exchange (1031 is the tax code section if you want to look it up). This part of the tax code allows you to sell one investment property to purchase a higher cost (more profitable) investment without paying capital gains taxes and depreciation recapture taxes. The 1031 exchange can be used in many ways such as selling a property and taking part of the profit out. But when most of the profit is rolled over into a new investment, you can defer taxes on the amount that is rolled over.

This can be a great way of building a financial legacy for you and your family. You’ll definitely want to seek out the advice of a highly qualified 1031 tax expert but there are ways of combining a 1031 exchange with a trust so that you pass on investment properties to your heirs practically tax free. Your heirs can continue building your investment business without seeing it crippled by high taxes. This is a secret to how the ultra-rich keep their wealth.

Key Steps in the 1031 Exchange

There’s no doubt that the 1031 exchange rules can be complicated. Below is the basic process but there are a half dozen or more variations. Some allow you to buy the replacement property before selling your current investment. Other methods allow you to sell first and then buy the replacement property. You will find a method to improve your investment holdings without paying capital gains or depreciation taxes on sold properties.

Here is the basic process.

  1. Properties qualifying for a 1031 exchange must be for business use or investment (“productive use” as phrased by the IRS).
  2. The replacement property must be of “like-kind” (which is generously interpreted by the IRS).
  3. A qualified intermediary is required.
  4. The investor cannot have constructive receipt of tax deferred sale proceeds at any time.
  5. The 45-day identification period and 180-day closing requirements must be met.
  6. The price of the replacement property must be equal to or greater than the relinquished property.
  7. The amount of mortgage on the replacement property must equal or exceed that on the relinquished property.
  8. All of the tax deferred funds from the sale must be reinvested in the replacement property.

Those are the requirements for a fully tax deferred exchange. However, you can pocket a portion of the profit and only pay the taxes on the portion of the profit you take out while still deferring taxes on the portion you roll over into the new investment. Below is a simple graphic version of the four-part process.

1031 Exchange Time Restrictions

Most investors consider the time restrictions to be the toughest part of a 1031 exchange (especially when commercial real estate is involved). As you see in the process above, there are two strictly enforced time requirements. You must identify a replacement property within 45 days of completing the sale of the property you are exchanging for a better property.

You can identify up to three different properties as possible replacement properties. However, as soon as the replacement properties are identified, the 180-day clock starts ticking to perform your due diligence and close the deal. Missing either one of these time requirements will completely disqualify your 1031 exchange and holidays along with weekend days count.

The other major requirement is that a Qualified Intermediary must be used. This is a person holding a specific license allowing him or her to make the financial transactions on your behalf. The logic behind this is that you are never allowed to have actual or constructive receipt of the funds from the sale.

Another important point is that neither the purchaser of your old property nor the seller of the new investment property needs to directly participate in the 1031 exchange. This all might sound complicated but it’s really not once you have an expert guiding you through the process. In the end, your tax savings are enormous because you can avoid them in full.

The 1031 exchange is sometimes called a “like-kind” investment. The words “like-kind” can confuse people into thinking they have to invest in an identical property that they are selling. That is not true. You don’t have to sell a $130,000 single-family home and move up to a $170,000 single-family home. The “like-kind” requirement only means that you have to reinvest in income-producing real estate. Your upgrade could be from a single-family house to an apartment building or a strip mall. Real estate offers limitless options. The main point of a 1031 exchange is deferring the capital gain and depreciation recapture taxes so that you have more cash available for your next investment.

This is one more way you TAKE ACTION towards growing your wealth legacy!

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.

What did you think of this article? Please leave a comment below.

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