Buying on sandwich lease options, selling on sandwich lease options, cooperative lease options, and working with Realtors® on lease options. Those are the different main headlines when it comes to earning big money with sandwich lease options. After a few decades of working with lease options, I sometimes get too far into the details with the many ways a deal can be put together. That’s when it’s time to step back and shine a fresh light on the basics for beginners. So, let’s get started…
If a 14-year-old boy can unlock the secrets to sandwich lease options, so can you!
Sandwich Lease Options 101
Here, my goal is to provide you with a clear path for how to get started with sandwich lease options in a couple of hours. This blog will not cover all the headlines mentioned above. This is basic sandwich lease options 101.
I tell this next short story because it is clear evidence of why I know you can succeed with sandwich lease options from the very start. The story is about a 14-year-old boy who attended one of my seminars with his father and discovered success in less than one day! His young mind shows that opening your mind to using less conventional methods sets you above the rest of the crowd. John’s amazing accomplishment took no more than the very basics – making a few telephone calls until he got a “YES, I’m interested in what a sandwich lease option can do for me.”
The day after the seminar, John started making calls and following the proven script that has worked for many people. Quickly, he had a “Yes, I’m interested.”
Because he was only 14, he couldn’t enter into a sandwich lease option contract. What he did is sell his lead to another investor in the local investment group for $500. All for less than 2 hours of his time. That is the fastest and easiest “No Money Down” deal I’m yet to hear.
Anyone can succeed with sandwich lease options!
As Easy as Making a Few Phone Calls
As young John quickly learned, success doesn’t require anything more than taking action. Your first action is as simple and easy as using this free script to start making a few phone calls. That’s all! A few phone calls and you WILL start finding prospects for your first of many sandwich lease option deals!
You do need one more thing along with the free script. You need phone numbers to call. I’m not selling you a list of prospective telephone numbers. Finding these numbers is also free. There are other easy-to-follow scripts for working with real estate agents and burned-out landlords but this script is specifically intended to work with “For Sale By Owner” advertisements that appear in every local newspaper, Pennysaver, and on craigslist. That’s where you find free prospect phone numbers to get started with sandwich lease options.
The free script and free phone numbers are the only two pieces you need to get started with sandwich lease options – as proven by a 14-year-old boy!
Best Tips for Sandwich Lease Option Phone Calls
First, if you are a real estate agent, you must disclose that in the telephone calls in most states (if not all states). If you’re not an agent, you probably don’t have anything that you need to disclose. You’re just a businessperson offering a business opportunity.
Which locations work for sandwich lease options? Any location. One of the best sandwich lease option investors (Jim Aydelotte) has been highly successful working from the cornfields where he lives. Others have tremendous success all across the country. In cities, small towns, and rural areas from Seattle to Miami and New York to California. Even many locations outside of the United States. Sandwich lease options work everywhere.
The biggest telephone tip is being prepared to let the person you call do most of the talking. You use the script to get the conversation started and then you let them tell their story to you. Their story is your gold mine when it comes to discovering how to structure a sandwich lease option with the most appeal to that person. You want to learn if they are in desperate financial trouble, maybe have a vacant house costing them money, maybe a job transfer to another city, or some other issue. Fitting a sandwich lease option into their story is how you solve the problem they most want to put behind them. Maybe they need some quick cash by next week or maybe they want a steady stream of rent checks for the next two years.
The seller’s story is your ticket to putting together a successful sandwich lease option!
Why Sandwich Lease Options are Your Preferred Investment Choice
No or low cost and no or low risk. That is the short answer to why you want to get started with sandwich lease options today. Almost all of the secret is in the single word “OPTION.” Completing the deal is always an option for you. Even after all the paperwork is signed and notarized, finalizing the deal is still your option. At the end of the deal, if the money is good, you opt-in. If something goes wrong with the dollar numbers, you can always opt-out of the deal. That is why I call these sandwich lease options instead of rent-to-own. Because the real power is in the word “option.”
But it’s not an option for the seller once the paperwork is signed and your small option fee is paid. This can be no cost because you can pay your small option fee to the seller using the much bigger option fee that you collect from the tenant-buyer. The option fee that you pay to the seller gives you the exclusive right to complete the deal. That option fee locks the seller into completing the deal, but you still have the option not to complete it if you decide to walk away. But walking away seldom happens once you know how to put together professional sandwich lease options!
Your Three Paydays!
Not one, but three paydays. Actually, it’s two big paydays and a string of multiple smaller paydays. You collect your first check a couple of short days after making those original few telephone calls. Just like 14-year-old John, as soon as a seller says “Yes, I’m interested,” you’re ready to collect your first paycheck. Putting a tenant-buyer in place is super easy today because buyers are having a ton of trouble qualifying for a mortgage. The tenant-buyer will sign a lease with an option to purchase with you and hand you a large option fee. You pay a small portion of that to the seller as your option fee and keep the substantial difference on day one! That substantial difference will vary by regional market, but you can expect it to be for $9,000 or more (4% of a $250,000 purchase price, minus the $1,000 option fee you pay to the seller).
A sandwich lease option is where you are the meat in the middle of the sandwich collecting fees for your services!
Paydays two, three, five, ten, eighteen, and twenty-four go on for the next two years. This is the difference in the rent that you collect from the tenant-buyer and the rent that you pay to the seller during the lease portion of the agreement. The rent on a $250,000 home should be at least $2,250 per month for the tenant-buyer. The seller probably has a mortgage for $175,000. A $1,200 per month rent to the seller will more than cover his mortgage payment and put $400 extra in his pocket each month. The remaining $1,050 is your second payday every month until the tenant-buyer completes the purchase in 18 or 24 months. Those multiple small paydays can easily add up to $18,900 or $25,200.
Now for your third and biggest payday! This is the difference in your purchase option price to the seller and the purchase option price for the tenant-buyer. When you pay the seller $200,000 and the tenant-buyer pays you $250,000, there is a difference of $50,000. That original $9,000 option fee the tenant-buyer paid is applied to the purchase price. That still leaves you in the neighborhood of collecting $41,000 for your third payday.
The example 3 Paydays are $8,000 + $25,200 + $41,000 = $74,200 for your first sandwich lease option deal!
Anyone can succeed with sandwich lease options! And here is where you begin. What you need to do now is TAKE ACTION!
- Strategies for Buying and Selling with Lease Options.
- You’re Wealth Building Arsenal.
- Investing In Real Estate with Lease Options.
- Cooperative Lease Options.
- Add Personalized Coaching.
- 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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