Key Takeaways
- Lease options provide property control without immediate purchase for an option fee of 1-5% of price.
- Sandwich lease options capture spreads on both option fees and monthly rent between master and sub-lease.
- Land contracts allow the seller to retain legal title until full payment, creating specific buyer protections needs.
- Wraparound mortgages let sellers earn an interest rate spread between the wrap note and the existing mortgage.
- All three structures require attorney-drafted agreements and state-specific compliance review.
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Test Your Knowledge
1.In a sandwich lease option, how does the investor generate income?
2.What distinguishes a land contract from a traditional mortgage in terms of title transfer?
3.How does a wraparound mortgage allow the seller to earn an interest rate spread?