Finding tenant-buyers for your sandwich lease options is an easy thing for you to do. But finding the highest qualified tenant-buyers is your goal. Now, is a great time for sandwich lease investors because rents have been rising for years and the number of homes available to purchase is extremely low.
There are good tenants and bad tenants. Good tenants don’t normally become bad tenants after they move in. Bad tenants were already that way before you gave them the house keys. As a sandwich lease option investor, you need tenants that pay the rent and take care of the house, but you also need to take additional steps to be sure your tenant-buyer can complete the purchase.
It’s a great time for you to help struggling buyers and also a great time for you to be selective about working with the highest quality tenant-buyers!
Start With a Big List of Sandwich Lease Option Buyers
Lots of people will respond to your advertising and telephone scripts but not everyone will be a highly qualified tenant-buyer the first time you talk to them. Even today’s qualified tenant-buyer might not be interested in the house that you have available right now. But one day soon, you will have the perfect house for the most qualified tenant-buyer and less qualified buyers can become highly qualified tenant-buyers shortly.
Every person you talk to is a potential tenant-buyer. What you do is build a list that you can use today, use next week, and use next year. Today’s nearly qualified buyer could be next month’s highly qualified buyer. Today’s highly qualified buyer might not want the house you offer today but could be the perfect match for the house you have next week.
Nearly everyone goes on your list of potential tenant-buyers for sandwich lease options.
You ask questions and listen closely to the answers from qualified tenants for sandwich lease options – how many bedrooms, how many baths, how many square feet? What price range, what neighborhood, etc.? You create a spreadsheet with this information that includes the potential tenant-buyers contact information. Of course, when you have a house matching their needs, you put a deal together right away.
Your spreadsheet will contain very valuable information. Not only will it be your source for highly qualified tenants, but the next time you are looking for a sandwich lease option investment, you review this spreadsheet looking for trends in what tenant-buyers are looking for. Finding qualified tenants for sandwich lease options is NOT about the oddball bachelor looking for a 2-bedroom, 1-bath with a 4-car detached garage for his car collection. You want to confirm what 4 out of 5 buyers are looking for. Almost always, it will be a 3-bedroom, 2-bath home with a yard – but maybe in a different neighborhood.
It’s always a WIN-WIN-WIN when you match what a seller has with what a buyer wants.
The Perfect Credit Score is Not the “Perfect” Credit Score
When looking for highly qualified sandwich lease option tenants, you want the “RIGHT” credit score – but this is not a perfect credit score!
You’re going to receive many applications with a wide spectrum of credit scores. Most credit scores will fall into one of these four categories:
Good credit – these people can qualify for a mortgage and purchase through a Realtor®. They don’t need you. But you can recommend a Realtor® if you are using the “Working with Realtors® System.”
Deadbeats – these are people who could pay their bills if they wanted to. They tend to be poor money managers and/or lazy. These are NOT the type of tenant-buyers you want in your house. One day these people could qualify, but they’ll first need a decent track record of paying their bills on time.
Poor credit with a reason – these are good people that had something bad happen to them. Typically, these are going to be your highly qualified tenant-buyers for a sandwich lease option. Common causes for their poor credit are bankruptcy, loss of job, divorce, medical problems with no medical insurance, disabilities, etc. They have already overcome their problems and are financially healthy again. These are the types of buyers you want buying your lease option homes.
Poor credit for an unknown reason – these people have poor credit but it is not known as to whether or not they have improved their situation. Their credit is still bad, but there is a reason. I recommend you stay away from those people or have a lender evaluate them first. However, these people definitely belong on your spreadsheet. These people are probably getting started at improving their credit. Buying a house is a big motivator for improving credit. Put these people on your spreadsheet because in 3 or 6 months they very well could become a highly qualified tenant-buyer for a sandwich lease option.
Many people that have bad credit with a reason often also have cash.
People want instant gratification. As soon as their credit starts improving, they want to reward themselves. They have some cash, and they don’t want to wait to get a mortgage before moving into a house suitable to the lifestyle they are again able to afford. This is a great reason for you to focus on middle-income homes.
People buy houses the way they buy cars. There are only two things many people ask themselves when buying a car – “how much down and how much a month.” You are offering the same conditions to purchase a home. An affordable down payment, with affordable monthly payments, and the option to complete the purchase in the future. That means the end price is not as important as the terms.
Qualifying a good tenant buyer requires learning how to read credit reports. You are looking for someone that had a blip in their credit score and now they are on their way back to financial stability. When looking at their credit report, you can see what they have paid recently and what still needs to be cleaned up. This gives you a good idea of when they will be able to qualify for a mortgage.
What a Proven Plan Will Do for You!
If you are willing to learn, I can show you the way. You do have to be committed to the process, and you’ll have it a lot easier with a plan… 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 qualified tenant-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 that 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:
- Investing In Real Estate with Lease Options.
- Advanced strategies for Buying and Selling with Lease Options.
- You’re Wealth Building Arsenal.
- Add Personalized Coaching.
- Working with Realtors
- Limited start using Cooperative Lease Options.
- 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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