{"id":525,"date":"2018-11-20T17:24:53","date_gmt":"2018-11-20T17:24:53","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=525"},"modified":"2023-09-27T01:00:49","modified_gmt":"2023-09-27T01:00:49","slug":"https-www-realestateleads-ca-blog-wp-admin-post-phppost525actionedit","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/https-www-realestateleads-ca-blog-wp-admin-post-phppost525actionedit\/","title":{"rendered":"Real Estate Investing with the \u2018Sandwich Link\u2019"},"content":{"rendered":"
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If anyone who\u2019s recently embarked on a career in real estate thinks that the industry is exclusively in the purchase and sale of residential properties, that notion will be quickly dispelled. They\u2019ll come to learn that it\u2019s a multi-faceted industry with many different approaches people can take to what is essentially investing in land for any number of purposes. Yes, the most common purpose is to provide a home for a family, but there\u2019s also providing land for a business and a whole host of other interests.<\/p>\n

Investing in property with the interest of making profit is another, and here at Real Estate Leads<\/a> our online real estate lead generation system is proven effective for connecting you with prospective clients with all sorts of different prerogatives when it comes to purchasing real estate. It comes highly recommended from a whole host or realtors who\u2019ve already gotten on board, and of course being realtor with extensive knowledge of every<\/i><\/em> aspect of the industry makes you look much more like the authority these clients will be looking for<\/p>\n

Today we\u2019ll be discussing sandwich link<\/i><\/b><\/em><\/strong> real estate investing, which is a less common approach that\u2019s very effective and something you can advise your clients on if you feel it will benefit them. What it is exactly is a recipe for rental property investing with little or no cash of their own.<\/p>\n

This strategy involves using lease purchases to acquire a rental property, and then placing a tenant in it using lease options. There will be 3 parties involved here, and \u2013 done right \u2013 sandwich lease investing can benefit all three of them. Let\u2019s take a look at who\u2019s involved here:<\/p>\n

A. The Frustrated Seller<\/b><\/strong><\/h3>\n

Typically you\u2019ll have a seller who\u2019s having difficulty selling a property through standard avenues, or must sell quickly to move and take a job. This individual is a great candidate for this particular investment strategy. Your client provides them with a way to get out of the home without needing to pay other payments. They get to move on with their life, while your client takes over their house payments.<\/p>\n

B. A Rent-to-Buy Tenant<\/b><\/strong><\/h3>\n

Some people want to own their home, but they are hampered by credit problems, a lack of a down payment ability, or both. Your clients offer them a lease purchase on the home, and they are able to rent it until their credit has been repaired and they\u2019ve been able to save up their down payment.<\/p>\n

C. Your Client, The Investor<\/b><\/strong><\/h3>\n

By identifying distressed sellers and helping them to move, and also helping people who want to buy and get into a home, it\u2019s a service you\u2019re providing to both. And \u2013 perhaps more to your interest \u2013 there is the ability to have your clients profit nicely here. Let\u2019s now look at the steps in the sandwich lease process:<\/p>\n

Step 1<\/b><\/strong>
\nThe first step is locating a seller who needs to move quickly, and they are in possession of a home with a low enough payment that allows it to be rented out each month \u2013 this should equate to a positive cash flow. Your clients execute a lease purchase with them, giving the 3rd<\/sup> party the option to buy the home at some date in the future, and typically 3 to 5 years away at an agreed-upon price. Your client assumes their payments, and then also pays them an option premium to help them to move. This number will of course vary based on the established value of the property.<\/p>\n

Step 2<\/b><\/strong>
\nNow you as the realtor begin marketing the property to rent-to-own buyers, and show photos of the home to those who express genuine interest in buying it. You execute a lease purchase agreement with them for the same period as the one with the seller. The rent-to-own buyer now has the option to buy the home on or before that date, without being explicitly obligated to do so. You must charge them an option premium at specific $ amount, and that\u2019s of course because your client will be into this deal with no cash out of pocket. The would-be eventual buyer will like this, as it promises to amount to a lot less than a down payment.<\/p>\n

Step 3<\/b><\/strong>
\nWith this agreement the monthly lease payment is set at a higher number than the payment your client is making on the home. This equates to your clients\u2019 monthly cash flow<\/u>. The price at which they will allow the leasing buyer to buy the home is going to be higher than the one you’ve agreed to with the seller. That\u2019s the appeal right there, and it has a lot of appeal to be sure.<\/p>\n

Your client now has a profitable monthly rental, and at the end of the lease there is the promise of the sale of the home to the leaser while they\u2019ve made cash flow profit along the way. Yes, it is possible that the tenant doesn’t buy, but if so your clients can renew their deal with the seller and place another tenant in the home or simply walk away.<\/p>\n

Sandwich leasing won\u2019t be a good fit for every market or every investor, but it is a fairly reliable way to generate strong cash flows for those who are in a position to use it appropriately.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

If anyone who\u2019s recently embarked on a career in real estate thinks that the industry is exclusively in the purchase and sale of residential properties, that notion will be quickly dispelled. They\u2019ll come to learn that it\u2019s a multi-faceted industry with many different approaches people can take to what is essentially investing in land for […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-525","post","type-post","status-publish","format-standard","hentry","category-general-topics"],"yoast_head":"\nReal Estate Investing with the \u2018Sandwich Link\u2019 - Real Estate Leads Blog<\/title>\n<meta name=\"description\" content=\"Real Estate Investing with the \u2018Sandwich Link\u2019 - Real Estate Leads Blog\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realestateleads.ca\/blog\/https-www-realestateleads-ca-blog-wp-admin-post-phppost525actionedit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Real Estate Investing with the \u2018Sandwich Link\u2019 - 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