Albert Einstein once said, “Creativity is Intelligence Having Fun.” I certainly agree with that when it comes to creative investing with sandwich lease options! Not only is this a fun way to invest, but it’s also a fun way to build a lifetime of wealth. Of course, there is just as much fun along the way because the investor (you) gets to choose from multiple ways to put these deals together. It’s also fun solving problems for people. There’s fun on the side because you don’t have to work at this full time. It’s fun knowing that you will leave a wealth legacy for your family. And the creative fun goes on and on….
Multiple Income Streams and Paydays From Sandwich Lease Options
As I’ve said time and again, sandwich lease options are all about a win-win-win for everyone – the seller, the buyer, and you as the investor. But make no mistake about it; you are in this to make a profit! As we know very well, there are three paydays for every sandwich lease option.
- The sandwich lease option fee in the beginning.
- The rent spread that you collect each month until the sale closes.
- Your portion of the final sale price.
The sandwich lease option fee. If you are new to sandwich lease options, this one is probably the most exciting because payday #1 is almost immediate. As soon as you have a house under contract for a sandwich lease option, you’ll easily find a tenant-buyer excited for the rent-to-own opportunity. In fact, it’s easy putting together a waiting list of tenant-buyers. Collecting your sandwich lease option fee happens at the same time the tenant-buyer signs the lease option agreement. This can be a payday for $10,000 or more (that’s not even your biggest payday). Typically, this happens in a matter of a few days. No need to wait months or years as with other investment strategies. Even better yet, this is only the first of three paydays….
The rent spread. This is your second (and ongoing) payday that is unique to sandwich lease options. You receive this payday every month until the tenant-buyer completes the purchase of the home (often you collect for a year to 18 months). This isn’t your biggest payday, but it does come in month after month. The rent spread is the difference between the amount you collect from the tenant-buyer each month and the amount that you pay to the seller. The key to the amount of the rent spread is often based on the seller’s mortgage payment. For instance, the seller might need $725 to cover the mortgage each month but the current market rate for neighborhood rent is $1,250. The rent spread that you collect each month is $525. Not bad for your smallest and ongoing payday! Then there is the third and biggest pay of them all….
Your portion of the final sales price. As the meat in the middle of the sandwich lease option, the purchase amount you pay to the seller is not the same as what the tenant-buyer pays to you. Again, this can often be based on the difference between what the seller owes on the mortgage compared to the fair market value of the home today. So that everyone gets a win in the deal, the seller will probably collect more than the outstanding mortgage but there will still be plenty for you. The numbers are different with every deal. An example could be that you pay the seller $225,000 at closing while collecting $265,000 from the tenant-buyer (now the proud new owner). That makes your third payday a whooooping $40,000!
In this realistic example, your total profit for a sandwich lease option could be as much as $59,000!
Creative Variations to the Sandwich Lease Option
As a new investor, does the sandwich lease option slightly intimidate you? It is a three-step process that can take 18 months to complete while you collect multiple paydays along the way. Those 18 months might not sound like as much fun to a beginning investor as it does to me with my decades of experience. So, let’s consider the cooperative lease option as a simpler variation that can be your ideal beginning place.
Cooperative lease options. This is an outstanding way to begin a part-time career as a real estate investor. Cooperative lease options only have one payday instead of three. However, it’s often a stepping stone to a full-time career into the three-payday sandwich lease option. But for that one payday, your risk is super low, and it takes almost no time at all. Being in and out of the deal within a week is entirely possible. Your task with a cooperative lease option is simply to connect the seller with the tenant-buyer and then get out of the way. Like I mentioned above, this can happen in a week or less. Connecting the seller and tenant-buyer involves nothing more than putting the lease option paperwork in place. Once these two reach an agreement, they work together until the sale closes. That means you don’t collect the rent spread or a portion of the sales price, but you do collect the hefty option fee that is the first payday… just for bringing the seller and tenant-buyer together… very creative and very fun!
Working with Realtors®. This is a highly innovative approach for finding sandwich lease options in today’s sellers’ market. Working with realtors supercharges the creativity when you combine the realtor’s knowledge of the marketplace with your knowledge about sandwich lease options. Realtors jump on this creative opportunity when they hear the words they dread the most, “I’ll have to rent my house if you don’t sell it soon.” For Realtors, today’s sellers’ market is about not having enough houses to sell. What you offer to Realtors is a creative way to sell more houses by including houses that don’t hit the gold mark that preapproved buyers demand.
Variety is the spice of life and lease options have variety.
Sandwich Lease Options are the Most Fun When They are Easy
Sandwich lease options are fun and easy when everything you need is at your fingertips. Everything is included from advertising for a seller to qualifying the tenant-buyer. It’s all backed up with fill-in-the-blank forms and contracts that have been approved by an attorney. The forms can be used in all states but as with any real estate contract, you should have these reviewed by a real estate attorney in your state. The instructions are so detailed that they include how to take the master forms and contracts that come with the course and turn them into your own master forms to use again and again.
The details are in the paperwork. For instance, a standard rental application is not appropriate for a sandwich lease option. After all, you’re looking for a tenant/buyer that can qualify for a mortgage in a few months. You need to know more about the person’s work and income history in addition to the standard landlord references.
As another example, a sample letter for the tenant/buyer to begin credit repair is included. This is truly a detailed course. As you already know, the tenant/buyer becomes responsible for the maintenance of the house that they will be purchasing. A sample letter reminding them about the required maintenance is included.
More sandwich lease option materials include:
- Criteria for lease option applicants.
- Option to purchase agreement.
- Property inventory.
- Tenant/buyer ledger.
- Letter for late tenant payment.
- Much more.
Everything you need for your success is here. There are advertising scripts and telephone scripts for qualifying a buyer before you meet them or go to the trouble of showing the house.
It’s all about a Win-Win-Win for everyone. Sandwich Lease Options are creative solutions that work for you, the seller, and the tenant-Buyer!
Take immediate action towards your creative and fun career with sandwich lease options!
- Investing In Real Estate with Lease Options.
- Cooperative Lease Options.
- Working with Realtors.
- Advanced strategies for Buying and Selling with Lease Options.
- You’re Wealth Building Arsenal.
- Add Personalized Coaching.
- Expand to Get the Deed “Subject To.”
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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