Sandwich L/O newbie questions - Posted by Chris-OH
Posted by Chris-OH on June 06, 2000 at 10:57:42:
I’ve been reading alot about all the things you can do with lease options and I would like
to ask some basic questions. The part I’m intrested in is using a sandwich L/O to build
passive income as well as some upfront cash. I’m currently looking at doing wholesale flips
but as I’ve been shopping I noticed there are quite a bit of newer (1-5 years) homes or more
expensive homes that seem to have low equity and are near or a bit below retail pricing. I
think there may some good investments I’m missing by not lookng at doing them through a
1.What is the profile of a deal that would work best as a L/O or Sandwich L/O?
Are doing sandwich L/O’s good for newer low equity houses with motivated sellers? Is there a
good formula for determining a good offer amount for a home that will be sandwich L/O’ed?
- How is a sandwich L/O payment structured between the original seller the investor and
person who sub-leases from the investor?
How do you determine how much the person who is sub-leasing will pay, and how much goes of
it goes to pay the original seller? Also is it better to setup a seperate contract with the
original seller with right to sub-lease or should everyone (seller/investor/sub-leasee) be
on one contract?
Does any one have a good example of a Sandwich L/O contract or contracts?
What do you call the money that you ask for upfront when subleasing to someone else? I’m
assuming this is where the initial cash is made with the rest of the profit coming on the tail end.