i need some clarification on what happens when you excercise your options with the seller and then sell to your tenant buyer when they excercise. would you have to do a double close on this? i have heard that lenders will not fund the loan if you are not on the title for at least 90 days. is this true? what other issues should i beware of. also, who pays for the closing costs on both transactions when you close?
Double closings are difficult to pull off these days, but not impossible. Still, there are easier ways to complete a sandwich lease deal. Instead, you can assign your agreement with the seller back to the seller, for the amount of the spread you are profiting in the deal.
if i assigned my deal with tenant buyer back to the seller i would then get an assignment fee from them at closing? however, i have heard that banks don’t like to fund the money for those types of deals. is this true? if that is the case, should i just have the owner cut me a check after closing since he is a friend of mine
You could place a lien on the property for the amount of your profit, and have that lien lifted at closing. There is an informative thread about this over here: http://www.naked-investor.com/forums/index.php?showtopic=4569 and here: http://www.naked-investor.com/forums/index.php?showtopic=5062
I have a better strategy, why not setup the transaction as an inverse purchase, Invoice the transaction for the profit / spread you have negotiated. It works all the time.