Law of Attraction Magazine Holiday Issue (Nov./Dec., 2018 | Page 46

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Can you Pr of it w it h 2 BR Homes on TERMS sw it ching f r om
Lease/Pur chase t o Subject t o?
By Chr is Pr efont aine, Your Smar t Real Est at e Coach!
After a miserable experience coming out of the
2008 Real Estate debacle, I did what we now call
AO deals ? 11 of them. An ?AO? stands for Assign
Out. It happens when we control a home with a
seller by structuring a lease/ purchase and then
after finding our tenant buyer (rent to own) we
assign the buyer back to the seller for an
assignment fee. I started to realize that if I can
?stay in the middle? of these deals (sandwich lease
in this case) I could create 3+ Paydays per
transaction rather than focus on getting a check on
a deal and then having to go find another deal.
NOTE: For those of you in Texas, don?t panic. NO,
you cannot do a Sandwich lease but you can buy
via owner financing or Subject to and then sell via
one of the many options.
I started seeking deals I could stay in the middle of
and of course I wasn?t picky because I was
enthralled by the fact I could start creating 3
lucrative Paydays per deal. Sometimes 2 BR homes
can be more difficult to sell and it happened to be
the first Sandwich deal I did. But WAIT, it gets even
more interesting as it turns into a Subject to!
How did it st art ?
At the time of this deal, I didn?t have a virtual
assistant or a team, I was doing all the calls (we
now have our family team, great support staff and
a team of VA?s) and I was the only person in the
company. I called on an expired listing and Deb
answered. I found out that Deb and her husband
were moving to Florida and the Realtor tried twice
to sell at $189,900 and could not get it done. Time
was running out with the winter approaching in
New England. I structured a 36 month lease
purchase (with a built in 12 month extension) with
her contingent upon finding my tenant buyer
(when you?re new, this is smart and safe so you?re
not obligating yourself to take on payments) for
the amount of the existing mortgage which was
approximately $167,000 and had a monthly
payment of $1126 PITI (principle, interest, taxes &
insurance).
Now, you may be thinking why would the seller do
this? Well, keep in mind, if she sold at full price
$189,900 (she had no offers) and paid the Realtor,
she?d be at approximately $180,000 before paying
closing costs, etc. My contract stipulated that our
purchase price was balance of mortgage at time of
cash out (so we capture the principle paydown
throughout the term).
The 2BR made it a bit more difficult to fill but we
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