Sandwich L/O- How to explain to seller?

[carcjp0]

All-- I've had dozens of conversations with sellers about doing lease options over the past few weeks-- some have been successful, but I think a lot more could be.  The specific problem I'm running into is this:

when they think it is me who is buying the house on a lease with option, they are often up for the idea and are willing to lease option me the property with a monthly rent in line with rental comps, a 2-3 year term, and OK purchase price (good enough to make it work)...

BUT

as soon as I disclose I will not be the one living in the property, they have an issue and start getting confused/asking me how I am making money on the deal/etc.

Curious to get thoughts from vets on there on how they position a sandwich L/O to a seller. 
i.e. Maybe you don't have to disclose verbally since your contract discloses you can assign? 
or
Maybe there is a certain way you say it, like 'i am looking for myself and also potentially as an investment', and try to leave it at that?

Thanks for any ideas...

[Rob in Atlanta]

Great question......I think it is important for full disclosure with the sellers.  Sounds like you are 'popping' the sandwich part on them late in the conversation, which can be surprising.  That also contributes to diminishing credibility.  I would suggest that you bring that up very early in the conversation.  I do and it has worked well for 20 years.

The buyer will do the deal based upon their confidence in you, even though someone else will be living in the property.  I would tell them up front that this is what you do for a living, you have clients who will be living in the property that have some issues with credentials, that we are working on cleaning up, that you will manage the transaction, and you will make sure it gets to it's completion within the contract period.  After all, you do have a profit built into the transaction so both you and the sellers have a proprietary interest at that point.

This is a minor adjustment, based upon what you have said.  Just bring it up early added to what you have done before and I think that adjustment will improve your ratios.

Hope that helps.

Rob

[chunkoftheearth]

Very good question.  I think the response you got so far was bang on.  Also, I think if you come across as a business offering this service it makes the difference too.  I haven't talked to a seller that second guesses what a realtor does.  Likely because they have conveyed this professionalism in the seller's mind.  You also might want to check to see if you're evaluating the seller's situation properly too.  Did they buy another house and are going to be stuck with 2 soon?  If so a seller like that will obviously be more open to having someone take over payments.  But what if in this same scenerio the seller has to sell the house in order to qualify fully for the other house they want to buy.  If you pitch the L/O to them in this case they will definitely not accept.  See, so it perhaps is just more analysing of the seller's real reason for selling maybe that way you can tailor the right deal for them.  As far as 'how to explain to seller'?  Tell them you might be able to offer a lease option.  That you will take over all expenses making them directly to the bank.  That you then put in a t/b who you screen carefully to ensure they can buy very soon.  And that you only deal with quality t/b's who can buy fast with your help because that's how your company makes money.  That your company makes money by actually selling the home, not by charging any commissions or fees.  Certainly the seller's confidence in you  is important, no doubt.  But in my opinion it isn't as important to listening closer to what the seller is saying and tailoring accordingly.  Because you can be super confident and be in a scenerio where you did a deal with a seller and it is the wrong deal because it isn't addressing their NEED.  Not every pitch leads to a signed deal, but this should get the job done.