Fear is good. Fear is healthy. Earning money is good. Earning money without fear or risk is very good. Let’s dispel one major fear – it doesn’t take a lot of money or risk to make your fortune in real estate. Fear is about the unknown. Fear is about not being in control. Sandwich lease options are all about controlling property without owning property. It’s about turning your fear into your hero story.
With a little knowledge, sandwich lease options become your comfort zone.
Sandwich Lease Option Investors Use Facts, Data, and Processes
The Wealth Building Arsenal is about gaining the knowledge you need to make decisions based on facts, data, and processes rather than Aunt Gertrude’s cocktail hour conversation about a hunch she has that a neighbor is selling their house down the block too cheap.
If you don’t yet know some of the basics about sandwich lease options, you should read the blog “How to Get Started Today with Sandwich Lease Options.” That’s a good place to begin. If you’re ready for the next step, let’s consider the facts and data about what sandwich lease options have to offer to no or low cost beginning investors wanting to minimize risk:
Low Start-Up Costs
No Bank Financing
Fast Growth into Multiple Properties without Owning Any Property
Monthly Cash Flow that You can Depend On
Collecting Upfront Option Fees
Big Profits when Options are Exercised
But I’m not naive, there are common fears that I know are real because I’ve heard them time and time again.
Fear of losing savings and capital investment.
Fear of not finding a good deal.
Fear of the unknown without a mentor or coach.
Fear of unknown costs.
Fear that it takes too much time.
Based on decades of experience, I can say with confidence that sandwich lease options and cooperative lease options expose you to the least financial risk compared to any other real estate investing method out there. Having low or no risk is the best way I know of to relieve the fear of failure.
It was none other than John D. Rockefeller (widely considered the wealthiest American of all time) who once stated:
“Own nothing, but control everything.”
No Fear Real Estate Investing Using Risk Analysis
The study of human behavior shows that people make all decisions based on the probability of two outcomes. The two possible outcomes are the reward of pleasure or to avoid pain. No fear real estate investing is the same. Fear comes from the perception that the risk is much greater than the probability of reward. And that is exactly what makes lease options the best method for real estate investing – low risk, big reward.
A gem about sandwich lease option investing is that it overcomes the daunting fear of losing a large amount of money because lease options use other people’s money to control properties rather than your money to purchase properties. It’s all upside with big financial reward and minimal risk. My students and I have made millions by investing no more than a few hundred dollars to gain control of a property with a lease with an option to buy at a future date. You then turn this into a Sandwich Lease Option that creates at least two paydays plus an income stream from that small investment. The reward far exceeds the risk, and the risk is very small to begin with. Sandwich lease options overcome all fear of real estate investing.
Overcoming the Fear of Real Estate Investing is a Process
You could frame this as overcoming the fear of real estate investing but really, it’s about decision making. Think for a moment about another time you made a financial decision. Maybe it was a car or Wall Street stocks, or even your college education. You didn’t decide in a vacuum – did you?
Proper decision-making is about developing a list of criteria that needs to be met. Then you look for the best opportunities meeting most or all those criteria. For a car, it might be gas mileage or safety features. For Wall Street stocks, it can be a history of earnings or future potential. For your college degree, it’s a mix of the right courses, knowledgeable professors, and affordability.
You need to first develop a reliable framework of criteria specifically related to real estate investing. Here is the framework for overcoming the fear of real estate investing:
Expert advice from a mentor or coach.
Educate yourself about real estate investing.
Conduct due diligence on specific properties.
Perform risk-reward analysis on individual lease option contracts.
Use other people’s money by controlling instead of owning.
Reap the rewards.
Enjoy the experience.
Overcoming the Fear of Real Estate Investing Happens by Getting Expert Help
I’ve enjoyed my own great success with sandwich lease options and believe there is plenty to go around for everyone.
For a $500 Option Fee, You Can Come Away with the Trifecta
Let’s look at an example of a sandwich lease option using realistic numbers (numbers will vary in your local market).
On the seller side of the transaction, you pay the homeowner a $500 fee for a lease with the option to purchase the house within two years for $200,000. That $500 option fee is pretty much everything you’ll have to invest but you now have control of a $200,000 property. But next week, you’re going to collect an $8,000 option fee from the tenant-buyer. His/her $8,000 option fee more than covers your small investment of a $500 fee. Your lease will cost $1,000 in rent each month, but you’re going to be collecting $1,750 each month from the tenant-buyer. In the second week or a month, you’ll have risked $500 to earn $8,250 ($8,000 – $500 option fee and then add in the $750 difference in the first month’s rent).
For a $500 risk, the reward will be $8,250 in the first month or less – that is very little risk for a very big reward!
You’re also going to collect the $750 difference in the rent every month as income until the tenant-buyer completes the purchase for $250,000 (you only have to pay $200,000 to purchase). Assuming it takes 14 months for the tenant-buyer to complete the purchase, here is the trifecta you earn:
$7,500 net option fee
$10,500 from the rent spread
$50,000 from the sales spread
$68,000 Total for a $500 Risk!
If you do want to invest but are having trouble overcoming the fear of investing in real estate, my suggestion is that you sit down with your partner to have an open conversation. Not necessarily about your fear but about the financial opportunities that investing offers. Also, about what you and he/she think are the best opportunities today. There are many of them. Then educate yourself to overcome the fear of sandwich lease option investing!
NO FEAR SANDWICH LEASE OPTION INVESTING BEGINS BELOW!
- Your Wealth Building Arsenal.
- Advanced strategies for Buying and Selling with Lease Options.
- Investing In Real Estate with Lease Options.
- Add Personalized Coaching.
- Cooperative Lease Options.
- Expand to Get the Deed “Subject To.”
- Round it all out by Working with Realtors.
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.
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