Sandwich lease
Hi all. I have a question regarding sandwich leases. Here's the scenario:
I lease purchase a house from a seller for let's say 1000/mnth and an agreed upon price of 125K up to 3 years.
I find a buyer willing to rent at 1200/mnth for 2 years with option to purchase at 145K.
Now, if and when the buyer decides to buy...i must first purchase the house from the seller. In my mind, the only way to do this is through conventional financing and then once completed turn and sell to the buyer for said amount.
This end piece (waiting for financing from a bank) could take weeks could it not? Is there a quicker way to purchase from the seller? or is there a way to bypass this and still make a profit off of the buyer?
Thanks in advance for any advice!
Vic
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Good question and I sure would like to know the mechanics behind this one.
From what I have read and heard from Lease Option people, (aka Wendy Patton and the like,) I believe they called it a double closing.
You would not really need to buy the house. It would all be done at a title company or attorney's office. The new buyer would Pay you X and from that you would take part of it and pay the original seller.
But I sure would like one of the pro's to comment and provide greater detail. Very nice question.
Ho...
Anyone?
Take both agreements to title company.
You could assign your position to Seller for your profit. Problem is that seller now knows how much profit you are making and may go sideways on you.
You could assign your position to your BUYER if he has cash.....which I doubt he does.
When you set your agreement have the seller excute a Mortgage to you for the amount of the price and your anticipated price. Might get flack...but hey its part of the paperwork. Some call it a Performance Mortgage.
Another way to set this up is to take both agreements to Title company and Tell title company to place your buyer and your seller on a Contract and that you will be paid a cancellation fee. To swing a big stick with seller tell the seller that you will execute a Quit Claim deed...Just adds legitamacy to the transcation.
Now you could do a DBL close. Take both agreements to title company.
Seller Signs deed at closing, you sign deed to your buyer. Buyers money comes in and all things are released. Deeds are recorded back to back along with all satisfactions and mortgages and note if applicable.
This is just a few ways to put it together.
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I like that last option...seems a bit easier. Thanks for the response JR_FL.
Best of luck!
Vic
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