OBJECTIVE
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.
BASIC TERMS
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.
4. If buyer requires financing, the minimum down payment is typically 25%
of purchase price. Downs vary based on purchase price and buyer
qualifications.
WHY ARE LEASEBACKS ATTRACTIVE IN A SLOW
ECONOMY?
The longer it takes the builder to sell out the homes in a development,
the longer they tend to extend the leaseback. The longer the leaseback
term, the more income received.
RISKS
As with any investment, there are inherent risks associated with leaseback
properties. Varying socioeconomic conditions may adversely effect
projected returns and or the ability for an investor to resell the subject
property upon completion of the leaseback period. Elton Realty has
contingency options, but can issue no guarantees as to the success of
their outcome. Any projections, rates of return and terms and conditions
listed herein are strictly estimates based on past leaseback investments
and are fully negotiable. It is highly recommended that all investors
consult a professional financial advisor before entering into any
investment.
FOR MORE INFORMATION - CLICK HERE!
LIST OF LEASEBACK PROPERTIES - CLICK HERE!
DISCLAIMER
This outline is presented for informational purposes only. It is highly
recommended that all investors consult a professional financial advisor
before entering into any investment. |
