OfflineCan anyone map out how the dual closing works on a sandwich lease option? Does the deed go into escrown from the seller when I exercise? Then do I close with the tenant buyer and put the funds into escrow and pocket the difference before routing to the seller in exchange for the deed? Thanks guys.
Matt
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Those are 2 different strategies. A double closing is when you write the contract as the buyer with a closing date. Once the contract is accepted, you find another buyer to purchase it from you on the same closing date. Your end buyer's purchase will actually fund your purchase. A Sandwich Lease is where you do a lease Option to get the property and then find another wanting to rent with the option to purchase, meaning sublease it from you. You will need to be sure the contact states that you will sublease and the owner agrees to it. They will exercise their option to purchase a couple of months before you exercize yours. Hope this isn't too confusing.
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If I understand you correctly, pjacobs, the lease option term between you and the Seller would be longer than the person you are subleasing the property too? Does the same terms (time period) apply when you're doing a "Subject To" deal?
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In the name of Allah, the Beneficent,
the Merciful.
22.He is Allah besides Whom there is no God: The Knower of the unseen and the seen; He is the Beneficent, the Merciful.
23. He is Allah besides Whom there is no God: the King, the Holy, the Author of Peace,the Granter of Security, Guardian over all, the Mighty, the Supreme, the Possessor of greatness. Glory be to Allah from that which they set up (with Him)!
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I was wondering about this myself. SPI, I've noticed alot of articles online saying the exact same thing... that "simultaneous closes" (aka "dry closes") are slowly being prohibited nationwide. I started hearing this months ago, from RE agents who were lying to protect their commission (the typical "you can't do that!" reflex) or title companies who didn't know how to do one, even after you explain it to them. They simply wanted to make more money, and were willing to say anything to do so, so I moved on and kept checking around.
I heard the same thing from guys with no experience who called themselves "gurus," and news reports which are either 6 months late or written by the same clueless blogger who wrote last season's review of Battlestar Gallactica. Separating fact from BS on any REI topic can be tough, and this whole "Closegate" (my term for it) has been one of the worse ones, from my perspective as a REI student. I've heard it from funding companies, who charge from $2,000 up to 3 points or higher (yikes!), but they're going to tell you that, because they wouldn't make a dime otherwise.
Is this from secondary companies trying to sprout up and milk profits from homeowners and REI investors? There's no one law that can ban simultaneous closes nationwide, but states can write their own, and title companies can simply refuse to do them without repercussions. Is the whole industry changing on this, one city at a time? I know the only way to know for sure is to check each title company, but are simultaneous closes disappearing anywhere else?
Paul: "I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when my fear is gone I will turn and face fear's path, and only I will remain."
Duke Leto: "I'll miss the sea, but a person needs new experiences. They jar something deep inside, allowing him to grow. Without change something sleeps inside us, and seldom awakens. The sleeper must awaken." - "Dune."
There are a few dozen techniques out there for REI, and they can be changed and combined to suit a particular deal. That adds up to thousands of ways to buy a property, and infinite ways to make money. I'm trying to use the KISS (Keep It Simple, Stupid) method to stick with what's most effective vs. the effort required to make it happen. The hard part is simply starting from no capital to using your own money for any transaction you want. So I'm trying to stick with the most direct ways to do REI, and paying less attention to techniques that are more exotic, and less effective.
I can't wait until I'm at the point where I can fund my own deals 100%. I already know how much faster and easier deals will be when you have a cash buyer in your pocket. It must be even better when you are that cash buyer. I know one thing to avoid now, which will make my (as well as anyone else who read this) start much easier. Thanks again...
Paul: "I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when my fear is gone I will turn and face fear's path, and only I will remain."
Duke Leto: "I'll miss the sea, but a person needs new experiences. They jar something deep inside, allowing him to grow. Without change something sleeps inside us, and seldom awakens. The sleeper must awaken." - "Dune."
Hi Kevin,
On a double closing; Are there two complete sets of closings cost involved.
1 that you pay on the first closing title, insurance, tax, transfer tax, lawyers fees, bank fees for setting up a new mortgage (if applicable), and escrow finds for oil. THEN the new buyer has the similar costs involved?
How does this all work and has it successfully?
I a newbie in Maine looking at numerous foreclosures in our county. I can get around the idea of the contract to buy from a seller. Because I believe Maine laws require that only Real Estate associates represent a sale. outside of a arms length transaction between two people.
As for Bird Dogging I think I can get into this at least to identify properties.
Do you need commitment from the sellers also?
I a bit confused In MAine.
topher23
Chris Riley
Thanks
Great Advice