Sandwich Lease Options: Your Complete Guide to Understanding Sandwich Lease Options. Wendy Patton
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Sandwich Lease Options:
Your Complete Guide to Understanding Sandwich Lease Options
by Wendy Patton
Sandwich Lease Options: Your Complete Guide to Understanding Sandwich Lease Options
by Wendy Patton
Copyright 2012 Wendy Patton
All rights reserved
Published in eBook format by eBookIt.com
ISBN-13: 978-1-4566-1030-2
No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.
INTRODUCTION
Lease Options: Anyone Can Do It!
Fourteen-year-old John and his father attended a seminar I spoke at in Houston several years ago. During one of the segments of the presentation I usually teach my students how to call sellers directly out of the newspaper or from Craigslist. When I teach this part of the class I make live calls to sellers for the benefit of my students so that they can hear what I say to the seller and how I gather information to determine whether or not their home is a potential candidate for a lease option. On this day, however, I didn’t even make any calls – we were simply talking about best techniques for calling leads.
The next day, while John was in school, he began circling the “For Rent” ads. After school he started making calls and followed my script – with no caller training – and he got a seller lead for a lease option who said “yes” they’d like to consider it. However, being only 14 and having no experience, he couldn’t and didn’t know how to enter into a legal contract. He went to his father and said, “What do I do?”
John ended up selling the lead to another investor in their local investment group for $500. He gave me a copy of his $500 check. Not bad for a fourteen-year-old kid and one to two hours of work. John immediately went on to develop a relationship with a local investor, and on his next deal (while still 14!) made 50 percent = $14,000 - of profit for his assistance in the deal. He has since done additional deals for much higher profits.
How and why can a fourteen year old kid do this and yet most adults would not? Is it fear of the seller saying no? Is it fear of the seller saying yes? Either way it is FEAR! We are afraid of failure. I believe we all have fear of failure and/or fear of success. At fourteen, he was not afraid of failure. Heck, he probably hadn’t even been dumped by a girl yet. He just applied what he learned and tried it. When you know what to say and when to say it, it makes it so much easier.
You are never too old or too young to start investing. If you can do the research and pick up the phone to make the calls, you are on your way. However, many of us stop before we even get started because of fear. We let that get in our way of success. We might have excuses of:
“I can’t possibly do that.”
“It’s a young person’s game.”
“It’s an older person’s game.”
“No one will say yes to me.”
“I have no experience.”
“I don’t have a good voice.”
“I don’t have money.”
“I don’t have good credit.”
Insert yours HERE…
All are negative talk and incorrect statements.
What’s going to make you successful with lease options? Taking the plunge! One of my favorite sayings is: Smart and Successful People Take Action Now and in the Present Moment. You’ll make some mistakes along the way, but so what? As long as you can get over the “I’m okay with myself if I make a mistake,” then what’s the worst thing that can happen?
John wasn’t hampered by fear, and so was able to jump in, take the plunge and make things happen--setting his financial future in motion. His example is by no means a huge amount of money, but nothing to sneeze at either. It is a fantastic amount for most people and extraordinary for a 14 year old. The money is not only important because John can now pay for college, but now John has choices. If he continues on his path in real estate investing, he will have the possibility of being independent and working for his own interests, unlike most of his friends. Choices are freedom!
For me, the most exciting facet of real estate investing is Future Financial Freedom - or as I call it - FX3. Everyone has different definitions of freedom. For some, it is financial; for others, it means having more control over their time. Let me have one of my BootCamp students explain this in their own words to you first:
Dear Wendy,
Our financial future has literally changed within the past couple of weeks by applying what my husband and I learned from your BootCamp. Even more importantly, what we’ve learned from your on-going, personalized support – you truly are the best! Keep in mind, my husband thought that I was crazy when I signed us up for your BootCamp and flew up from Florida to Michigan to hear you speak. It truly was the best thing we have ever done. Please share my personal testimonial with your classes. I’m a believer, this does work!
First off, I have to mention when we attended your seminar we had just completed a 1031 exchange, which gave us the great opportunity to start our investing career by buying 3 houses. Yes, it was so great having 3 houses sitting empty and one with a renter that lived off of us for free! This renter was so nice she gave a whole room to her pet rabbits to roam freely in after we had just re-habbed the house!!!
During the BootCamp my name was drawn to purchase a house on a lease option. Yes, I jumped for joy like I had just won a prize. The next day after the Coronas wore off I figured out what I had just committed to – a house that is a 1,000 miles away, where it actually snows, the pipes freeze, and they have things called basements! Yes, being from Florida this is just what I’ve always wanted - NOT!!! We were up for the challenge and Wendy made it so easy with her support along with the great contacts and help that we had from others who attended the boot camp. Not only did we get a great purchase price and terms with the owner, but today we have a pending contract for a lease option that will cash flow us $600 a month and at the end of the 18-24 month term we will profit $107,400!!! Gosh, I guess that will cover the cost of the class – TRULY AMAZING!!!!
When we came home from Wendy’s class we decided no more renters. We turned around booted the bad renter out, (and no we didn’t keep the rabbits!) We sold all of our houses on lease options. So my 3 houses we had sitting empty, we now cash flow $700 monthly and we will profit within 18-24 months, $227,900!!!!!
Now comes the best part . . . I finally put Wendy’s class to the test. I went out and found an owner that was willing to do a lease option with me. Every Realtor I spoke to, (and many investors as well), told me no one in their right mind will do a lease option with you in this market. The Florida market is way too hot. They are right. It is hot. Appreciation in some of our areas is anywhere from 34-40%. I got a gorgeous house that looks brand new on a lease option. I also got a killer deal on the rent at $950 a month – normal rent would be $1425! I did put $5,000 down which will come off the purchase price. They were asking $200,000 and it’s worth $239,000, so I offered them $210,000. The terms are 14 months, enough time to refinance it if I have to. My new tenants bought it on an 18-month term. We will cash flow on a monthly basis $845.00 ($500 of that will be applied towards the purchase price) and we are selling it for $299,900 – that is a profit of $89,900. Amazing, is this for real??? I’ve since quit my job and I’m doing this full time. Thank you again Wendy for changing our lives!
Deb and Eric Larson
Why I Chose Real Estate