The leaseback model brings a willing homeowner (Seller) together with an interested Buyer (Investor) to achieve a mutually beneficial transaction.
In this scenario, the Seller desires to remain in the house after closing on the sale of their property. The Investor’s ultimate objective is to rent the house and get a return on the investment. A leaseback can accomplish the goals for both.
The property is presented to the Investor through a platform that shares a thorough description of the building and lot size, room count, features, condition, appearance, age and improvements. The Investor submits their offer that includes the purchase price and rental terms such as the length of the lease and monthly rent. It may also include the ability to prepay rent. If agreeable to the Seller they sign the contract.
As is customary in a real estate transaction, the Investor will conduct an inspection to confirm the information that was represented. Any final contract negotiations are resolved at this time. A title examination, survey and any mortgage payoffs are ordered in preparation of closing.
At closing the title to the property will transfer to the Investor, the Seller will receive any sale proceeds as well as the rental agreement that was negotiated at the time of contract.
The Seller becomes the Renter and pays monthly rent. The Investor becomes the Owner/Landlord and is responsible for the real estate taxes, property insurance and maintenance.
A leaseback gives a Seller the ability to stay in their home and release their equity while giving an Investor immediate cash flow with a renter in place who will treat the property as if it was their own.