Wrap around mortgage or lease option?

[Pete Storseth]

I found a home for sale that needs alot of work, I mean ALOT. No way I'd do a fix and flip.

I'm in texas, and it's not legal to sandwich a lease option deal, but wrap around mortgages are ok. I dont see much of a difference in this case.

The offer I'd make to the seller is 150k, 7% interest, seller financed, with 20% down. Then, I'd market it on CL for Buy Like Rent, As Is, 170k. The down payment would be 10k over mine, and the interest would be 9.9%. I'd make 10k to cover my closing, realtor, inspection and private loan interest and profit. I'd also make about 14k in Residuals over the course of the years 5 to 15 years of monthly payments.

Which is this? Wrap around or lease option sandwich?

[Jeremy Pace]

@Pete Storseth is it considered a sandwich if you purchase the property with seller financing and then lease it w/ option?

Also, if you're the optionor in an option transaction, it's not a deposit, it's NROC (non-refundable option consideration) your lawyer will thank you.