I had an idea for sandwich leases which would let you walk on the whole deal if you couldn’t find a subleasee.
You find a motivated seller.
You get a straight option to buy for about 2years.
You get an exclusive option to lease for 1 month (lease period would be for about 2years).
Within that 1 month option to lease you can find your subleasee. Then you can exercise your lease and sandwich the deals together.
If you cant find a sublease you don’t have to exercise your option to lease, but you still have the real estate option to purchase for 2 years so you still can control the property.
Please let me know your thoughts and opinions, thanks.
So if you would explain why a seller would let you tie up their property for a two year period this would be rather important I would think to a seller. How are you going to explain this to a seller, I must be missing something?
You can do it with a regular lease-option (but I was just suggesting do it with two separate contracts, so if you default on the lease then the option is still in play).
But that wasn’t the part that I was trying to emphasize.
What I was thinking about was the part where you have a 1 month option to lease-option. (I don’t know if there even is such a thing as an option to lease???). But I thought of it last night.
If you could get an exclusive lease-option tied up for 1 month for “inspection”, (or for you to “check out to see if you really want to live in the neighborhood”). And during that one month period you find a buyer who would want to sublease the house. Then you plunk down your hard earned money and exercise your lease-option agreement. Then sublease to the other buyer you found.
Tell me if that sounds ridiculous but I thought it would be a way to make sure you find a buyer/subleasee before you jump into the deal, thanks.
the same thing pretty much would be accomplished by finding a potential lease-option buyer and learning there needs. Then go out and find a deal to “sandwich” with that potential buyer/subleasee and which fits there needs.
let me know what you think and tell me if you know any better ways of accomplishing this “just in time” kind strategy.
I see no problem with taking an option with a seller for a certain period of time that will give you time to find a buyer.
What we must remember is to be fair with our seller, tying up a property for a long period of time would serve no purpose in making it beneficial for the seller, unless we are willing to compensate the seller for doing it. Otherwise it would be very lopsided in our favor and sooner or later someone would start complaining and rightfully so.
Basically our creative industry is not regulated in and unto itself. Sometimes I believe a Code of Ethics should be made up for our industry. We know not everyone would abide by them, but for those legislators and governmental agencies who monitor our industry at least this might be a start to let them know the majority of creative investors are looking to make it morally and ethically correct in how we do business.
Until that time we as creative investors should always look at all sides to make sure we doing what is right for all concerned in our dealings.
This is just something I have been thinking about so do not take it personally, however the two year option prompted it and if you think about what I have stated you will understand why.