Lease Option When Controlling - Sandwich
The term SANDWICH means you are the middle man in the deal.
Say you have a Lease Purchase Home, currently worth $100K, market rent is $1000 a month.
When You Are the Lessee - Tenant Buyer
* You lease with option for $900 a month and offer to pay $200 of each occurance
of minor maintenance, with the Seller responsible for anything over that.
* Your term is 5 years, and the rent stays the same for those 60 months.
* The Seller likes that because there is no vacancy and no damage. *
When You Are the Lessor - Optionor
You then find a Tenant Buyer for $1100 a month, who will pay you up to $200 a month in minor maintenance to you, the Master Tenant.
* Their Strike Price is stepped up over the next 5 years, set in writing:
* $110,000 Months 1-12
* $112,000 Months 13 - 24
* $114,000 Months 25 - 36
* $116,000 Months 37 - 48
* $118,000 Months 49 - 60
You, the Real Estate Investor, profit by:
1. the Spread on Rent $200 a month $1100 - $900
2. Extra Monthly Option Payment $100- $400 a month (negotiable)
3. Back-end profit IF and WHEN the tenant buyers exercise their option from your purchase price to your sell price.
You can have new Lease Option agreements every 12 months with new move in option consideration to execute the Option to Purchase portion.
And new fresh leases.
See Equity Split Lease Options for Expensive Houses.
