Outline an opportunity to produce significant cash on cash returns investing in leaseback properties.
OVERVIEW OF TERMS
Elton Realty LLC specializes in leaseback homes from 200,000 to 2 million +. We handle all aspects of the transaction, from finding the builders, to locating the right property to fit our investors budget, to overseeing the contracts, to the exit strategy, which may include selling and or leasing the home. We only work with qualified builders/developers. What follows is a general overview. For more information please click on the links below!
WHAT IS A LEASEBACK?
A leaseback is a home sold to an investor/buyer who in turn lease it back to the builder under a set of terms. Builders engage in leasebacks for a number of reasons: They help generate cash and sales. They help validate the floor plan to other prospective buyers. Perhaps, most importantly, they help to set a comparable price or 'comp'' for like homes in the development.
Upon termination of the lease, the builder restores the premises to its original condition and returns it to our investor. We can then assist with any of the following options:
1. Sell the home.
2. Sell the home and help the investor roll into another leaseback.
3. Lease the home.
4. The investor moves into the home.
All terms are negotiable to fit a variety of circumstances and needs. Current terms (subject to change at any time) are as follows:
1. Eighteen (18) month term of lease. After eighteen months the lease may be extended as long as builder requires.
2. Leaseback payments are approximately equivalent to 10% of the purchase price of property divided by 12. A $500,000 property would then leaseback for $50000.00 per year or 4166.66. These numbers are approximate and can vary with each deal.
3. Lease is triple net. Builder is responsible for all expenses, i.e.,
property taxes, insurance, maintenance, and homeowner association dues.
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