Model Leasebacks available - Positive cash flow opportunity!
Model Home Leasebacks
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Available NOW - Limited supply!! Positive cash flow!!
Investment Highlights:
Investor with good credit is able to get into this with less than $3000 cash out of pocket
No Mortgage Payments during construction (9-12 months)
No Tax Payments during construction (9-12 months)
No HOA Payments during construction (9-12 months)
Minimum 24 month Lease to the Builder AFTER construction is complete
After 24 months (actually 36 months), sell the upgraded property for a profit!
More Info....
A builder or developer sells a model home to a buyer and then pays the buyer by LEASING the home back to use as a MODEL Home. It is like being paid to stay out of the house.
Since Builder Developments will take longer to sell out in today's Buyers Market, the Builder may stay in the Model for a 3-5 year period. The Builder will pay for furnishings and finish the home LOADED with upgrades. The Builder's reps will even help sell the property for you at the end of the lease period.
It s a win-win situation for both seller and buyer.
Model home sales and leasebacks have proven a thriving niche market for more than a decade here, but recently buyer interest has jumped.
The deals are driven by many factors. The large number of second-home buyers who don t have to move right away, for one, and the increasing numbers of builders eager to show off one new product while putting their money into the next are just two scenarios.
When a developer builds a model, it is usually financed, which ties up the builder's credit. They would prefer to use the credit and capital in their business and not have it tied up in model homes.
Therefore, they offer a good deal to an investor who will buy the model with their credit or capital, and the developer leases it back based upon an agreed rate of return.
For the buyer, they get a guaranteed rate of return and then they get the home with model furniture thrown in at cost.
In simple terms, let's say the buyer closes on the deal in 2007, for $300,000. Every month after that and for the term of the lease that buyer will receive a check for $2,000 ( 8% X $300,000 divided by 12 months).
So over the course of two years, the buyer will take in about $48,000 in lease payments. If the builder extends the deal to 5 years, the buyer will get about $120,000, or 40 percent of the property s purchase price, all for not moving in.
Often, lease payments can more than cover the monthly mortgage payments made during the duration of the lease. Also, the buyer can either benefit from the escalating value of the home and neighborhood.
The tax advantages appear excellent. Usually, the mortgage interest along with the real estate taxes, and any maintenance costs are deductible expenses, and you can depreciate the property ($8727 per year for a $300,000 model).
These homes are carefully put together. In a model home, builders always try to put what they feel they are going to be able to sell the most. So they spend hours making sure the floor plan is right, all the details are right that the whole house flows together.
Upgrades, they call them. A model is going to have more bells and whistles than the average home, and the buyer s going to get the furniture.
In high end homes sellers sometimes don t lease back the furniture, they merely sell it at cost (or even give it away). In a $300,000 house, for example, complete furnishings could go as high as $80,000-$100,000.
