Sandwich Lease Option – $31,000 Profit on My First Deal

Thank you all here for giving me enough support to “get off the fence” and to get out there doing it. I’m just a young guy recently out of school busy playing the rat race. I got into the corporate world working 70 hours per week and traveling around the U.S. making someone else very rich. It didn’t take long to realize there has to be a better way.

I’m always open to options, and along came the Carleton Sheets course about eight months ago, which managed to focus my attention enough to dive further into real estate investing. Along the way I found CRE Online and heavily absorbed much of the free information given right here. After almost two months of digging through this site and occasionally asking a few questions, I took that almighty step away from the fence and took action.

I placed an ad in the local paper. I received a call, then another, and things began to get interesting. I then increased my marketing, joined local clubs, attended seminars, and bought a few more books. I could sense things starting to fall into place, and it only drove me further to succeed. I picked up a local mentor to help me with the areas I was unsure about such as the contracts and the legalities of it all.

He focuses mostly on sandwich lease option deals, and–low and behold–18 days later I had my first home under contract with a lease option. Now it has been only five weeks since I placed my first ad in the paper, and the market here is amazingly hot. (If I can do it here, you can do it anywhere.)

Interesting enough, this deal came about from the very first person who ever called my very first ad. At first this lady was just curious as to what I had to offer (a rubber-necker, I call em) and was like most of the calls I receive today, but I had pitched my deal to her anyhow just for practice.

Five weeks later her situation had definitely changed when she called me back to say she was in the process of packing her bags and wanted to sign paperwork tonight. (Motivated seller!) Now this was more like it. I called my mentor, we did some research, and voila!

Here’s my first deal

This is a nice 2001 townhome, 3-bedroom, 2.5-bath in a nice area of town. I didn’t have to do a thing to it but put my sign in the yard. We put the property under contract for $147,500 with a three-year lease with the right to renew for another three. The home comps at around $160K to 165K, we negotiated the price down using the Peter Conti range technique and the “if you were to list this with an agent it would cost you…” technique.

I did have to put up $3,000 in option money to help the lady move out and get her into a new place. The monthly mortgage payment is $1,135 per month. Just yesterday, I signed the lease with my tenant buyer for $7,000 in option consideration, plus first months rent of $1,240, option price of $178,500 at years end.

No maintenance, no hassles. WAHOO!!!! I received over 250 calls in the first two weeks on the “rent-to-own” ad. This is just the quick and dirty of it all, but this stuff really does work. If you really want to learn, just start doing it and see just how much and how fast you can pick it up when you put the ideas and practices into place.

Someone once said, “Action creates opportunity.” Well I took action and just locked in $31K in profits in under two months’ time, not to mention a wealth of information and know how. I just came from cashing my first check, and what a feeling it is. It all began with taking that tiny little step off the fence and making my first step towards financial freedom.

So, are you going to just sit and watch or are you going to come out and play?

By CREOnline Contributor

A content contributor to the original