Sandwich Lease

Sometimes certain complexities exist in Real Estate which can make a sale or purchase impossible in any reasonable time frame. That’s what makes this one of our favorite and most creative solutions for making the best out of a bad situation.

Definition

A lease in which a party rents property from the property owner and then subsequently leases it out to another tenant. In a sandwich lease, the primary party is both a lessee and a lessor, meaning that the party both collects rent and pays rent.

How it works

We offer leases from 1-year up to 5-years on properties that qualify for this strategy. We take care of any renovations or upgrades to get the place ready for a tenant at no cost to the owner. We assume all the risk and liability for the property, offering a “layer of protection” between the tenant and the owner. We have the property professionally managed, working diligently to keep it occupied for the duration of our lease.

This strategy can work especially well with a property that has legal or mortgage constraints that will take years to eliminate. Rather than keeping the property vacant and subjected to neglect, deterioration, vandalism, ultimately becoming a visible blight on the neighborhood, we keep the house occupied and maintained until further action can occur.

Past Performance

A good example of this is a house we currently have under lease in Tampa, Florida. The bank is continuously attempting to collect mortgage payments from our client’s deceased mother and threatening her with foreclosure and other legal action. This particular house had gotten caught up in the “mortgage meltdown” of 2008 and the loan was transferred several times between different lenders going insolvent. The current bank has rejected every offer and short-sale package we’ve sent them since the client first made contact with us. We are led to believe the bank does not have the proper paperwork to finalize any action on this asset. The place was vacant for 2 years. Within that time, the house flooded, appliances were stolen, the trees had overgrown to the point where the limbs were damaging the structure. Once we had the lease in place, we went in and replaced all the flooring, replaced the stolen appliances, had the landscaping trimmed back, and keep it occupied with happy, solid tenants to this day – creating a win-win-win-win situation for everyone involved. This particular client has made over $30,000 in “accidental” income as a result of working with us.

• Our client is collecting a 100% worry-free monthly income
• We’re also generating a monthly income
• The tenants have a very desirable place to live
• Residents of the community no longer have an eyesore in their neighborhood decreasing their property values

We were able to accomplish all of this at no cost to the client. Simply put, there is no Realtor in existence who is willing or able to employ a strategy that works as well as this. In fact, this particular client had exhausted all resources with Realtors and agents before finally contacting us. Not one of them could offer any relief. She now has the peace of mind to move on with her life without worrying about the status of her mother’s house and you really can’t put a price tag on that.

Another, more recent example where this strategy would have been ideal was during a conversation at an open house for a property to be auctioned off due to family member passing away. This was the house she grew up in as a child, and there was significant sentimental value in the home. After expressing her sadness in just being there to show the house, we asked the daughter, “Did you ever consider just keeping the property?”. Her response was, “We already own our own house, my husband works long hours at his job and neither of us have the time or the energy to deal with tenants and maintenance issues.” Had she not already been in a contract with the auction company, we would have offered to rent the house ourselves, allowing her to collect a monthly income – 100% worry-free.

If you have a property in a similar situation, have some questions about the Sandwich Lease strategy, or just want a free consultation, simply fill out the Property Information Profile and a representative will be in contact with you within the next 5 business days.