Any Info On Lease Option Sandwich
I received an email from TenantStream recommending a course by Steve Majors
called Leased Option Sandwich. Has anyone heard of or used this system.
I am new to real estate investing and would appreciate some feedback. If no one has used this program can you recommend one to me.
I've read the posts on this forum so I've got a general idea of this technique. What I need to learn is the specifics. How, When, Where, Why and with Whom!
Thanks for any help you can give me.
Sheils
Hi, you do understand Lease Option? There is much literature on this site.
The utilization of what is called sandwich leases is an old method of playing with leasehold estates. What it consists of is each level of lessor merely leases to the next in line, a sub lease.
You buy the Empire State Building with four mortgages. You then lease the building to an operator management co. they in turn lease out different locations or floors in the building and these are sub leases but now they lease out again to a sub tenant and a series of sandwich leases come into being.
Example. Draw a picture of the Empire State Building and along side of it draw a picture of a nice big juicy hamburger. the top bun, the lower bun and then the lettuce, pickels (onions)? and da meat. Each is a leasehold in decending order.
That is pretty much what Zekendorf did so many years ago. Of the two being hungary, I think the sandwich is more attractive.
Helpful I hope Lucius
Hi Lucius,
Thanks for your help. I do understand the general concept of what you said. Great visual!
What I need is the how to to make this system work. What forms to use, what 's the best approach to use, What's step 1, what's step 2 ......
Is anyone on the forum using this technique. Do we have a resident guru?
Thanks,
Sheils
Hello Dave, thanks for your reply.
The house is located in a 70 yr old neighborhood, like houses are selling between 49 to 55k. Combined mortgage payments total $496/month. I still owe 41k on mortgages. The expected value of the house in a year I expect to be about the same as prices have not risen much over the last few years. The assessed value in 2000 was 48,900. Rent prices in the area average 400/month for alot less house.
The couple did not say what exactly was wrong with their credit except that they could not get a home loan a few years ago and had been working on rebuilding their credit. They have been renting a house in the same neighborhood for seven years without a problem.
When I said the second note was secured by the land I purchased I was wrong.
One other question, After reading the fine print on the two mortgages it said the house is to be used as my primary residence, is this anything to be concerned about if I try to rent or lease it.
The first mortgage is assumable if that makes any difference.
Thanks for the help, Mike