Sandwich Lease Option
Maximize Profit Without Ownership
What is a Sandwich Lease Option?
A Sandwich Lease Option is a powerful creative real estate strategy where an investor leases a property from a seller with the option to buy it, then subleases it to a tenant-buyer for a higher rent and purchase price. The investor profits from the difference between the lease payments and the rent collected from the tenant-buyer, as well as from the spread on the final sale.
In a sandwich lease option, the investor acts as the middle party, creating value by securing favorable terms with the seller and passing them along to the tenant-buyer.
How a Sandwich Lease Option Works
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1
Lease Agreement
with the Seller
The investor (you) leases the property from the seller, securing the option to purchase it within a certain period at an agreed price
2
Sublease Agreement with the Tenant-Buyer
You then lease the property to a tenant-buyer at a higher monthly rent and secure an option for them to buy
it at a higher price.
3
Rent Spread
You collect the difference between the amount you pay the seller and the rent paid by the tenant-buyer.
4
Final Sale
When the tenant-buyer exercises their option to buy, you profit from the difference between your purchase price from the seller and the sale price to the tenant-buyer.
Benefits of Sandwich Lease Options
For Investors
For Sellers:
For Tenant-Buyers:
Minimal capital required to control a property.
Monthly cash flow from the rent spread.
Profit from the sale without needing to own the property.
Limited risk since you don’t have to close on the purchase if the tenant-buyer defaults.
Guaranteed rental income.
No need to handle property management.
Higher likelihood of sale since the tenant-buyer is committed.
Option to buy with flexible terms.
Ability to build equity while renting.
Opportunity to secure a property despite poor credit.
For Investors:
Minimal capital required to control a property.
Monthly cash flow from the rent spread.
Profit from the sale without needing to own the property.
Limited risk since you don’t have to close on the purchase if the tenant-buyer defaults.
For Sellers
Guaranteed rental income.
No need to handle property management.
Higher likelihood of sale since the tenant-buyer is committed.
For Tenant-Buyers
Option to buy with flexible terms.
Ability to build equity while renting.
Opportunity to secure a property despite poor credit.
