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Sandwich Lease Options – How Everybody Benefits!

Sandwhich Lease OptionsIn short the sandwich lease option strategy involves buying a property from a motivated seller at favourable terms and subletting and selling it to a hungry tenant buyer at a higher price.

In each transaction there are three parties:

1. The original seller of the property
2. The investor
3. The hungry motivated buyer

First, let’s look at why an investor would get involved in this type of transaction.

1. The investor can buy and control a property for a nominal sum (as little as £1 plus legal fees)

2. Investor does not need to obtain finance/mortgage to buy the property

3. Investor doesn’t have to get involved with the hassles of maintenance issues and can pass these directly on to the tenant buyer

4. Investor receives a large lump sum at the start of each transaction as commitment money from a tenant buyer

5. Investor can charge above market rent to tenant buyer and thus achieve fantastic cash flow

6. Investor receives a large lump sum at the end of the transaction when the tenant buyer completes.

7. Investor can buy a property even with bad credit history.

8. No risk as the investor gets to control the property rather owning it

Secondly, the benefits for the seller include:

1. Seller is assured of a sale and is pleased that investor will be taking care and paying the mortgage payments until completion.

2. There are no estate agency fees to pay

3. Seller will be paid a competitive and guaranteed rent (close and up to market rent)

4. Seller is not responsible for any maintenance/repairs during the lease period.

5. Seller has a quality tenant – somebody that is going to treat the property as their own home and look after it.

Lastly, the benefits for the motivated tenant buyer include:

1. No need to obtain finance straight away, buyer has time to save up for a deposit and other completion costs

2. Tenant buyer is able to put down a smaller deposit (option fee) compared to buying with a mortgage

3. A locked in price so if home values rise the buyer benefits

4. Buyer has the ability to walk away

5. Buyer can move in just two or three weeks

6. Buyer has the ability to rectify any previous adverse credit history before applying for mortgage

The wonderful thing is that you can do as many of these as you like because it’s really an untapped market. There are so many motivated sellers out there and there as just as many people looking to rent a property and buy over a stretched period of time.

Amandeep Sandhu is a UK (London based) property investor specialising in acquiring property using no money down strategies. Amandeep has written a home study programme titled “Secrets of Investing in Property without Money, Mortgages and Risk”.
To find out how you can learn the secrets of investing in property without money, mortgages and risk, visit http://www.leaseoptionprofits.co.uk

 

photo:http://thompsonengineering.com/hr/Benefits/





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