RE: Wholesaling Lease Options

[Edwin W.]

I want to start getting into Cooperative Assignments and have read Wendy Patton's book on Lease Options and "Subject-To" Deals. In the chapter dealing with Lease Purchases, she mentions that she networks with Realtors and fronts the commission in full to them in a seller's market. Does the commission you're paying the realtor come from the tenant buyer's option payment? Do you get paid only when the purchaser decides to buy home? I am confused.

From page 157:

"Majestic Realty can guarantee you a monthly fee of $1,150.00 for a lease term of 5 years. We would then guarantee the purchase of your home within the 5-year term at a price of $255,900.00..........................The purchaser will put $7,500 (3 percent) down, which will be paid directly to (realty company name) and applied toward the listing portion of the commission and the purchase price at closing. Any remaining commission due will be paid out of the seller's proceeds at closing, to (realty company name) and Majestic Realty, LLC."

[John Jackson]

@Edwin W.  without reading the whole chapter or section it's hard to say for sure, but sounds like a sandwich LO and she's probably going to market it for say $10k down or certainly more than $7500 down.