Sandwich Lease Options - 10 Steps to Your Success - Lease Option Investing with Wendy Patton (2023)

The best time in recent history to invest in real estate was around 2012, when the industry was emerging from the Great Recession and foreclosures were rampant everywhere. The next best moment was every moment between then and now. But that was yesterday... the most important thing today is to act with a strategy that has advantages without disadvantages.

What you are doing with a sandwich rental option is a money making option!

Here I share my secrets and strategies forSandwich rental optionslike you. When you find your niche, you will refine your version.

The basic lease option is a way to control ownership with little or no money out of pocket. When upgrading to the sandwich lease optionStart putting money in your pocket long before the deal closes.

The sandwich option is not a get-rich-quick scheme. Done right, it puts money in your pocket right away, but it usually takes a year or two to get the most bang for your buck.Your Future Financial Freedom (FX3)happens when you betone, two or three of these trades in your financial channel every month.

I kept tweaking my tools and techniques, adding information from every optional course I could find. Today I have signed hundreds upon hundreds of lease option contracts.

Step 1 - Understand sandwich rental finances.If you want control of the property, worry a lot less about the purchase price. Instead, you are much more interested in the "terms" of the contract. This opens up the largest market unavailable to most investors and is limited only to heavily discounted distressed sales.

In a sandwich, the meat is in the middle.Your meat in the gameIt is the financial difference between what you are willing to pay for the property and the selling price of the property.FORWARDthe renter-buyer to pay you a higher rental option fee than you paid the seller at the beginning of the deal.FORWARDcharge the tenant-buyer a higher monthly rent than you pay the seller.

Step 2: a real example.There are manySandwich Lease Option Variants. Every company is unique. Here it isa basic deal straight out of my archives a few years ago that any investor can easily put together.

It's your job to build a win-win-win scenario where everyone feels like a winner.

I placed an ad looking for a house in a decent area.One owner responded to the ad (Barb).Your Realtor® listing has expiredwithout being offered its asking price of $189,000. Barb was interested in selling and open to a long-term lease. It only took a short conversation to realize that his definition of "winning" was closing the sale for no less than $185,000. This was almost the full market value of the house. That meant I had to look at other terms of salePut the deal in my "Win" column.

Barb wanted to move into a tenant-landlord relationship, where the landlord would have to maintain the property. He had found a house by a lake that he could move into for $1,000 in cash.That's all the money you needed from the business to rent the house you wanted to live in.In order to make her completely happy, I had to do all the maintenance of the house I was going to rent to her.

I decided it would cost me another $4,000 to replace the carpet and paint the inside of the house. This would attract a good tenant with the possibility of buying the house in the short term. I'd be in the house for $5,000. Less than 3% off the $185,000 purchase price.

He needed to see the rest of the picture and the possible terms of the deal. An annual increase in value of between 6 and 7% was expected. This meant he could expect over $11,000 in value in the first year. That more than covered my initial cost of $5,000.

I placed another ad looking for a renter-buyer.Alexa was one of the first people to respond to the ad. Alexa had saved $10,000 to buy a house. But she had bad credit and the mortgage brokers didn't want to work with her.By accepting the $10,000 call option fee, Alexa managed to enter a house.

This created the final piece of the win-win-win formula.

This is what my numbers looked like:

(Video) The Different Types of Lease Option Deals – Explained by Wendy Patton

Seller Option Fee (Barb) - $1,000

Improvements - $4,000

Renter-buyer option fee (Alexa) + $10,000

Left in my pocket +$5,000

That's $5,000 I made on the first day of the business.I also changed the maintenance requirements for Alexa. I went on to pay Barb $1,100 a month in rent, but I got $1,450 from Alexa.That left $350 in my pocket every month.until Alexa exercises her calling option. The price of the Alexa Call option was $225,000 with a 6% accrual clause (appreciation in value) if the purchase was not completed within 18 months. After factoring in my upfront costs, the Alexa option fee, the positive cash rent, the sale price, and associated transaction costs,I made $43,700 from the entire deal.

All controlling property without owning it!

Step 3: Find motivated sellers.Every state, city and county has motivated sellers. These sellers are not difficult to find. I suggest looking for nicer homes that require little to no work. In general, there are two main categories of sellers. Those who are financially motivated and those who are driven by circumstances.Investors in Sandwich Lease Optionspursue people motivated by circumstances.People who have to sell at any price as long as it doesn't cost them anything out of their own pocket.People with two renters, an inherited house, burned down homeowners, job changes, etc. People willing to commit to a long-term lease as long as someone else makes the monthly payment and even provides some positive monthly cash.

When you speak to these people, make sure they understand the benefits so they see the benefit of renting the home to you with an option to buy.

Step 4 - Evaluate potential offers. The best thing to do is have a screenplay written for youthat you can improvise by gathering information from your interlocutor. Your most important skill is listening to the tracks you can build. Here's a script I use often:

Hi, my name is ________. I'm calling about your house for rent.

Can you tell me if it is still available?

When is it available?

When was the house built?

Have the kitchen and bathroom been updated since construction?

Do you have a garage or basement?

(Video) Wendy Patton teaching Lease Options in the UK

Is the yard fenced?

If the house sounds like something you would want to own for aBread rental possiblethen ask the question.

Wow, this house looks amazing, would you consider selling it?

Do you know how much you want for the house?

When could I look at the house to see if he would be interested?

Step 5 - Estimate your potential income.The terms you offer must be based on your understanding of theFinance You'll quickly find several ways this can work. Always pass numbers with oneprofit statement asaccompanies the course.You always have options. What at first glance looks like a great sandwich shop might turn out to be more appropriateCooperative leasing optionthe oneSubject to existing financingtreated in a more detailed analysis.

The key information you need for your revenue analysis is the seller's requirements in terms of price, monthly payment and lease term. Selling price is often the most important factor for the seller. Knowing this, you can make an offer so the monthly payment and length of option term works best for you, but the seller is still happy with the deal.

have moreadvanced perk points you want to know about.For example, if the seller owes $100,000 on their home at the beginning of the option but only owes $90,000 at the end, you can claim a credit for the $10,000 paid on the mortgage balance during the option period. Course materials come inmuch more of these advanced techniques.

Step 6: Negotiate the deal.Always focus on the positive, interesting things. People like to know that you like their home and an immediate relationship develops. Relationship is especially important with rental options because you're asking someone to do itgive you control of your home with little or no down payment. You build a relationship by asking questions like:

"What do you want to achieve with my help with the house?"

Make your first suggestion. Keep It Simple Polishing the first offer too much can make you unwilling to hear a counter offer or what's important about the deal to you. A good opening technique is to handwrite some sketches of the setting.

You'll know when it's time to create a formal contract when the seller says something like, "I want to see the details of the contract before I accept it."

Step 7 - Prepare the Papers for the Sandwich Lease Option. For the sandwich lease option, you need a total of six separate leases.Three between you and the seller and three similar ones between you and the tenant-buyer. The three main contracts are:

The Option Agreementgives you ownership control without ownership.

The Rental Agreement: Specifies how long you rent the house and how much you pay monthly for the rent.

The contract of sale: sets out the terms of the final sale.

(Video) Lease Option Paperwork Requirements for Tenant-Buyers and Screening

You need the same three main contracts on the tenant-buyer side of the transaction.

Step 8: Find and qualify good hire buyers.There are several ways to find renter buyers, but the most reliable remains posting classified ads on sites like Craigslist. However, you must word your ads differently. Each ad is designed to fill a slightly different need than the person you're considering.Buy into a sandwich lease option.

You'll find applicants with a wide range of credit issues, but most of them fall into one of four categories:

Good credit - these people may qualify for a mortgage and buy through a real estate agent®. They probably don't need you.

Deadbeats: These are people who could pay their bills if they wanted to. They tend to be bad money managers and/or lazy. This isn't the kind of buyer you want in your home.

Bad credit for a reason: These are good people who have had bad luck. Common causes include bankruptcy, job loss, divorce, medical issues without health insurance, disabilities, etc.These are the types ofBuyers looking to buy their homes with Sandwich rental option.

Bad credit for unknown reason: These people have bad credit, but it is not known whether they have improved their situation or not. Your credit is still bad, but there's a reason. I recommend you stay away from these people or have them evaluated by a lender first.

Qualification of a good tenant-buyer requiresLearn to read credit reports. You are looking for someone who has had a credit problem and is now returning to financial stability. You must use standards to qualify your tenant-buyers. Simple sorting patterns I use include:

No unpaid court judgments between landlord and tenant.

Ability to pay all pending judgments/fees.

Reference of a good landlord.

The monthly gross income corresponds to 3 times the monthly rent.

If there is an insolvency, it must be deleted.

Option rate available or to negotiate/finance.

(Video) Lease Option - Sandwich Lease Option Ebook Giveaway Day 1

You need this information before you decide to accept or decline the renter-buyer.

Step 9: Complete the Approved Renter-Buyer documentation.After the approval of a tenant-buyer for yourBread rental possiblehome, just fill out the paperwork and have it signed. This is the basic checklist you need:

Calculate the registration fee.

Check and confirm the completed application.

Confirm that the candidate meets the criteria.

Collect a non-refundable deposit.

commissioned projects.

Complete and sign the registration form.

Sign the contracts.

Step 10 - Completion - Your BIG payday!If you've worked with your tenant and buyer early on and put them in touch with a mortgage broker, you'll know when they're ready to buy the home. Find out when the buyer is closing and keep in touch with the seller about it. Go back and forth until you get the exact day and time. You must be the coordinator, nobody else.You need to make sure all the pieces fit together.

Are you ready to act?

There are always three kinds of money in sandwich rentals: money now, money in the months to come, and money at the end!

  1. They areWealth Building Arsenal.
  2. Advanced strategies forPurchase and sale with rental option.
  3. Investment in real estate with leasing options.
  4. Cooperative leasing optionswhen the time comes.
  5. expand toGet the certificate "subject to".
  6. Add toadapted training.
  7. all aroundWork with brokers.

by Wendy Patton

For over 30 years I have used the Sandwich Lease Option system to make millions of dollars for myself and my students. From my experience I know that there is a lot of space and opportunity in the real estate investment market for anyone who wants to get involved in finding profitable deals. For this reason and for my personal success I share theSandwich-Lease-Optionssystemwith others.

If you found this information helpful, please check back soonwendypatton. com.

(Video) Lease Option Video Tidbits - Week 3: Sandwich vs. Cooperative Lease Options

Subscribe to my for more exclusive contentFeed-RSSjChannel since Youtube.

What do you think of this article? Please leave a comment below.


1. The Power of Lease Options… Control without Ownership
(Wendy Patton)
2. Lease Options - The Basics
(Wendy Patton)
3. How to Profit with Lease Options | 3 WAYS with a Sandwich Lease Option
(Chris Goff)
4. Lease Option Course Testimonial: How they work
(Wendy Patton)
5. Required Paperwork to complete for a Lease Option Deal
(Wendy Patton)
6. The Rules of Thumb when it comes to Doing Lease Options
(Wendy Patton)


Top Articles
Latest Posts
Article information

Author: Prof. Nancy Dach

Last Updated: 22/10/2023

Views: 6384

Rating: 4.7 / 5 (57 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Prof. Nancy Dach

Birthday: 1993-08-23

Address: 569 Waelchi Ports, South Blainebury, LA 11589

Phone: +9958996486049

Job: Sales Manager

Hobby: Web surfing, Scuba diving, Mountaineering, Writing, Sailing, Dance, Blacksmithing

Introduction: My name is Prof. Nancy Dach, I am a lively, joyous, courageous, lovely, tender, charming, open person who loves writing and wants to share my knowledge and understanding with you.