A question to you coaches and veteran investors... At the end of a sandwich lease-option when your tenant-buyer steps up to purchase, is the double-close required or can you actually do a new purchase contract with owner and simply assign to tenant-buyer? Reason for the question is two-fold: 1. Losing money in closing costs and 2. Avoiding possible title seasoning requirements by your tenant-buyers mortgage lender.
Scenario: You are the investor in the middle of a sandwich-lease-option, done with 2 separate contracts with your tenant-buyer (lease and option). Tenant-buyer steps up to purchase. You go to owner to execute your option, filling out a new purchase contract with a price that is the option price less credits. You then do a simple assignment of that contract and your assignment fee is the difference between this purchase price and the purchase price in your tenant-buyer option (less credits).
What are the pitfalls or potential problems with this? My thought is that if you have a tenant-buyer that must step out of the lease and option, and in the search for a new tenant-buyer, a buyer steps up and makes an offer. At that point you would do a purchase contract with owner (for the option price less credits) and assign to the new buyer for the difference. What is the real difference between this buyer and a tenant-buyer in the home that is now ready to purchase?
A question to you coaches and veteran investors... At the end of a sandwich lease-option when your tenant-buyer steps up to purchase, is the double-close required or can you actually do a new purchase contract with owner and simply assign to tenant-buyer? Reason for the question is two-fold: 1. Losing money in closing costs and 2. Avoiding possible title seasoning requirements by your tenant-buyers mortgage lender.
Scenario: You are the investor in the middle of a sandwich-lease-option, done with 2 separate contracts with your tenant-buyer (lease and option). Tenant-buyer steps up to purchase. You go to owner to execute your option, filling out a new purchase contract with a price that is the option price less credits. You then do a simple assignment of that contract and your assignment fee is the difference between this purchase price and the purchase price in your tenant-buyer option (less credits).
What are the pitfalls or potential problems with this? My thought is that if you have a tenant-buyer that must step out of the lease and option, and in the search for a new tenant-buyer, a buyer steps up and makes an offer. At that point you would do a purchase contract with owner (for the option price less credits) and assign to the new buyer for the difference. What is the real difference between this buyer and a tenant-buyer in the home that is now ready to purchase?