Selling real estate that you don’t even own is a big-time way of thinking outside the box. At first blush, you might even think that selling property that you don’t own is illegal but you couldn’t be further from the truth – people just like you and me are doing it every day using sandwich lease options and cooperative lease options.
Buying real estate by thinking outside of the box is fun, exciting, and profitable when you know the details of sandwich lease options and cooperative lease options!
Most real estate investors think the only two strategies available are to either “buy and sell” or “buy and hold.” After all, that’s what the big financial institutions tell investors they should do. You can take out a 30-year mortgage to buy and hold real estate or you can flip a few properties each year using your own money or by having a money partner. The same thing happens on Wall Street where the advice is to buy and hold stocks and bonds. Or the more adventurous Wall Street investors become day traders, which is a form of flipping.
There is a much better alternative with real estate – you will reduce risk and make more money by working outside the box buying real estate with lease options…
Controlling Properties for Little or No-Money
Conventional wisdom isn’t always right. It doesn’t have to take money to make money. With sandwich lease options and subject-to deals, investors control properties worth much more than what they could normally afford to purchase. Use your brain – not your bank account – to take control of a property and make money without ever actually buying it. Sandwich lease options are a smart and simple way to control property with little or no cash. Sandwich lease options enable you to immediately collect upfront option fees, have long-term cash flow in the middle, and lump sum profits at the end.
When you know how to structure the deal, you will use the tenant-buyer’s larger option fee to pay your much smaller option fee to the seller (and immediately collect the hefty difference between the two). This is the secret to controlling a $300,000 house for no money down. And then you go on to collect monthly cash flow from the rent before cashing a large lump sum check when the deal closes in the end. It’s all done by having much more money going into your pocket than coming out of your pocket.
Your profit potential grows exponentially with sandwich lease options without any cost to get started.
So, that was about “buying” real estate (or controlling it) outside the box with nothing down. But what about the tenant-buyers that you need to complete the deal?
Selling Real Estate with Sandwich Lease Options
“Lease option” is a somewhat legal term for what is more commonly known as “rent-to-own” (also known as lease-to-own, lease/purchase, or lease with an option to purchase). Many people are familiar with rent-to-own for living room furniture, a washer and dryer, a TV, and other household appliances. These rent-to-own businesses have been around for as long as I can remember. And there is a good reason why they stay in business – because it works. Rent-to-own works particularly well for people with limited resources but who are sincerely working to build a future for themselves and their family. And it’s no different with real estate. Rent-to-own customers are the same hard-working and sincere people who will become some of your best tenant-buyers when you use sandwich lease options to sell real estate.
Sure, you’ve seen all the TV Shows showing you how you can make “big bucks” buying and flipping houses. However, what they don’t show you is all the investments that ‘fail’ because the investor took too much risk. Along with being no cost to get started, a sandwich lease option is a ‘no risk’ way to get started. Like the tenant-buyer, you have the ‘option’ to purchase the house but not an obligation to purchase. If the tenant-buyer decides to walk away from the deal, you can always put another tenant-buyer in the house. Or you can also walk away after earning the original option fee and the monthly rent checks because you have no obligation to buy a sandwich lease house. This is about thinking outside the box in ways that eliminate risk at no cost.
All you need is the desire to learn and the willingness to take immediate action.
Outside the Box Sandwich Lease Options Get Even Better…
When you control the property but don’t own it, you don’t want to pay for maintenance and repairs. An effective way of doing this is by sticking with nice clean white-picket-fenced houses that make tenant-buyers feel good about the home they are buying. But some houses do need repairs and all houses need maintenance. A few minor repairs can be an excellent way for a tenant-buyer to get into a home on the ground floor that they otherwise won’t be able to afford – maybe a 4 bedroom instead of a 3-bedroom.
If the house needs repairs, you make those repairs the responsibility of the tenant-buyer in exchange for a reasonable purchase price. With a sandwich lease option, any repairs will make the seller happy by improving their equity position even if the purchase option isn’t exercised. Just as importantly, the tenant-buyer becomes more motivated to complete the purchase because they now have sweat and money invested in the repairs. The entire deal becomes a win-win-win for everyone involved. The seller has his or her repair problem solved, you make a reasonable profit in the middle of the sandwich lease, and the end buyer is now positioned to become a homeowner.
Everyone wins by thinking outside the box!
Buying Real Estate with Sandwich Lease Options Combines Strategies
We already know that most investing is based on one of two strategies. One is to buy and hold long-term for the cash flow. The other is to buy and flip for a fast profit. Buying real estate with lease options is the best of both worlds by combining the two strategies.
The lease side is essentially a buy and hold strategy. You may not have bought the property outright, but you do control it during the time of the lease. This entitles you to the rent profits as if you did own it. Also similar to buy and hold, you gain the appreciation in value when you sell in a sandwich lease arrangement. Even better, you accomplish this without the risks and responsibilities of actually owning the property.
The combination also comes with the flip advantage. Basically, that is exactly what you are doing by flipping it quickly (within days) to an eager tenant-buyer for your profit at the end of the deal. Obviously, their intention to buy is a huge part of the deal. It’s your biggest payday. It doesn’t get much better than having the advantages of both strategies – buying and flipping PLUS collecting rent by holding the property in your portfolio for a short time.
The biggest challenge when using lease options is that most buyers, sellers, and real estate agents don’t understand sandwich lease options and other real estate financing methods that are outside the box. You must know how to explain the processes and clearly present the pros and cons of any creative real estate deal.
Thinking outside the box empowers you to make your own financial choices in life (Financial Freedom X3).
Envision what’s possible in 2022 and beyond. Focus on innovative ways to empower sellers and buyers at every step of the way along their journey. You do this with the best tools and resources they need to buy or sell a home. Put another way, you must think outside the box in a real estate world that is changing every day. What worked for generations in the past is not working today.
- 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.
If you found this information useful, please visit again soon at wendypatton.com.
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