Sandwich Lease Option
Creative FinanceA sandwich lease option puts an investor in the middle of two deals. You sign a master lease with an option to buy from the property owner, then find a tenant-buyer who signs a sublease with an option to buy from you — at a higher monthly rent and a higher purchase price. You are the filling: the owner is the bottom slice, the tenant-buyer is the top slice, and the spread between the two sets of numbers is your profit.
The appeal: you control a property, and collect a monthly spread plus option-fee income, without ever owning it, borrowing money, or putting up a down payment — the tenant-buyer’s option fee can even cover the one you pay the owner.
Disclose your role, in writing, to both sides — you are not the owner and can’t represent yourself as one. And if your tenant-buyer exercises but you can’t close with the owner, you’re in breach. Support every sandwich lease with a solid master option and a title commitment.
For the full worked example and the traps, see the sandwich section of lease options & rent-to-own.