Best Negotiating Strategies with Sandwich Lease Sellers

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Big A-Ha moment for sandwich lease option investors. Buying at a low price is much more important to a rehab-and-flip investor than to a sandwich lease option investor. Imagine how much easier that makes it to negotiate these deals. Sandwich lease investors only want to control the property. They don’t want to own the property. They want to pay an option fee not take out a mortgage.

Keep negotiations with sellers simple!

Understand the Differences Between Negotiating with Sellers or Tenant-Buyers

Pay very close attention to the difference between negotiating with a seller or a tenant-buyer. You need to approach each with a different mindset. Both mindsets are Win-Win but you’re working with people who have different goals for the outcome of the sandwich lease option negotiation. The seller has an immediate financial problem they want to solve quickly. The tenant-buyer wants to buy a home in the near future but it will take a little time to solve the financial situation they have.

The seller has the house as an asset that enables her/him to quickly get out of whatever jam they are in. The tenant-buyer doesn’t currently have much for assets. They need to acquire and build homeownership over time as an asset. Still, both get what they want and need with a sandwich lease option but with different solutions. Naturally, each comes to the deal with a different thought process.

I start out by having a rapport-building conversation with the seller.

Learn About the Sandwich Lease Option Seller

Don’t start the conversation by telling the seller you’ll only offer 70% of what other houses in the neighborhood are selling for. That’s only going to put the seller on the defensive. The fact is that you’re going to offer him/her as much as you reasonably can (which will be close to full market value). The place to start is by getting to know a little about the person before jumping into full-blown negotiations.

I have a strong preference to be in the house when negotiations begin. Preferably, sitting comfortably at their kitchen table or in their living room. It puts the seller more at ease when they are in their comfort zone. Remember, a sandwich lease option is a new idea to them but you are already very familiar and experienced with the process.

Wendy’s Tip
When you’re in the seller’s house, tell them what you like about their house,
not what you don’t like. For example, perhaps you’ll see something unusual,
like older woodwork or a nice fireplace. Ask the seller about it. If you see
the seller likes to golf, talk about golf whether you like golf or not.
Always focus on the positives, the interesting things. People like to know
you like their house, and that builds immediate rapport.

Build a connection with the seller. If the seller doesn’t like you, they will come up with every excuse under the sun not to make a deal – even if it is in their best interest. With a sandwich lease option, they are giving you control of the house. The seller must feel comfortable with you. What you want is for them to think that you have a solution for their problem and that you have their interest in mind.

“What is it that you’re trying to accomplish with the house as a result of my help?”

Ease into Solving Their Problem with a Sandwich Lease Option

You need to know if there is a mortgage payment and how much it is. Often the mortgage payment is the cause of their financial difficulty and a sandwich lease option is the answer. Once you control the house, one of the most important things you need to be sure of is that any mortgage payment is being kept current.

Now you have something in common – you both want the mortgage payment to be paid. You can tell them that a sandwich lease option will assure the mortgage is paid. If you haven’t already, you may need to first explain more about the lease option process. A main point is that you will make sure the mortgage is paid. You offer to pay it directly. You let them know it will be paid even if the house is vacant or a tenant-buyer falls behind (you will pay it yourself). The seller may express concern about triggering a “due on sale clause” but that will not happen. Anyone can pay anyone else’s mortgage payment without it meaning that a sale has taken place. Parents (and others) pay their children’s mortgage all of the time. With a sandwich lease option, the sale doesn’t take place until the tenant-buyer is approved for a mortgage to pay the seller’s mortgage off in full. Paying their mortgage is no big deal at all. You can even offer to have it paid through a 3rd party escrow account if that makes the seller feel more comfortable. What’s important to both you and the seller is that the mortgage is paid on time and every month.

Win-Win solutions build rapport and confidence.

Seller Scenarios Proven to Work Best

There are too many scenarios when a sandwich lease option will work for the seller to cover in one blog. There are almost too many to cover in my book Investing In Real Estate with Lease Options. Of course, it’s not only the experienced sandwich lease option investor that is helped with these techniques. These negotiation tips are a great help to beginning investors getting started with Cooperative Lease Options.

Successfully negotiating with sellers works in all markets. It works in seller markets and buyer markets. People have problems in life and sellers needing to sell a house fast, for top dollar, are at the top of the list for sandwich leases. They want to solve their problem and get on with life. They don’t want the hassles of managing a lease option for the next two or three years. They don’t want to be landlords.

Your sandwich lease option solution is a great match. You want a low or no-cost way to control the house. You’re only buying an option on the house. You don’t need a low, low purchase price that makes negotiations difficult and pressure-packed. Patiently explain this to the seller in a friendly way. Your option fee is non-refundable (the same way the option fee you collect from the tenant-buyer is non-refundable). There is zero risk to the seller.

Preferred sellers are the ones who contact you through advertising, marketing, and word-of-mouth. These sellers are much more motivated than sellers that you contact. But contacting potential sellers does work when you do it right!

Ready to have your first conversation with a sandwich lease option seller? Everything you need to close the deal is right below!

  1. Investing In Real Estate with Lease Options.
  2. Advanced strategies for Buying and Selling with Lease Options.
  3. You’re Wealth Building Arsenal.
  4. Add Personalized Coaching.
  5. Cooperative Lease Options.
  6. .Expand to Get the Deed “Subject To.”
  7. 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 fortunes to be made 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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