OfflineHi all
Had a question regarding sandwich lease options. I've heard of this used as a "No money Down Strategy" and had a question regarding it.
So if I have a buyer lined up, I would...
1)sign the lease with the seller
2)sign the lease with my buyer
3)and sit in the middle and collect the doe as the middle man because I worked the numbers in such a way that its profitable for me
MY QUESTION IS... What if my buyer loses his job and can't pay the payment??
Then I would be screwed unless I could make the payment myself..right?? Or is there some "escape clause" that can save me here...
Thanks
Jordan
"You gain strength, courage, and confidence by every experience in which you stop and look fear in the face. Do the things you think you cannot do. Tough times never last, but tough people do"
YOu should have an escape clause in there. You would have a couple options, I am not the expert here.
1. give the house back to the owner through your escape clause,
2 make the payment , get the tenant out and find another tenant buyer and do it again.
Donna Doo
"Don't tell me I can't, Tell me how I can."
The other thing is you can "what if" yourself to death. Take a chance and DOT IT!!
"Don't tell me I can't, Tell me how I can."
The other thing is you can "what if" yourself to death. Take a chamce and DO IT!!
"Don't tell me I can't, Tell me how I can."
Jordan,
Your observation would be a good one! Sandwich lease option is a low money down technique! And as you have seen, you must qualify your tenant very well to ensure that you are not caught holding the bag financially. Your lease with the seller is separate unless the seller was to agree to and understood that you were doing this to make money and help them fill a vacancy. Then you could generate a performance based lease agreement with your seller. I hope that his information helps!
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You can collect a non-refundable 3 months security deposit from you buyer right off the bat. This way, if something was to happen, you still have money in the back, he was leasing the house, but is no longer going to buy it, so you can then turn and rent it out, or do another lease option with someone else, and you'd have 3 months to find someone since you'd have that money in the bank.
Jeremy
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
Depending on your state, I would do as Jeremy suggested, But I would ask for upfront Money in the amount that would cover you until you can evict a dead beat. Like in NY its 6 months, P.A. I hear its only 30 days. Bottom line is do a thorough screening on your prospective tennant.
JMO
Richie.
Thanks for all your feedback
Much appreciated...
Jordan
"You gain strength, courage, and confidence by every experience in which you stop and look fear in the face. Do the things you think you cannot do. Tough times never last, but tough people do"