HomeVestors Knows How To Capitalize On A Sale Lease Back Agreement


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Investors who have a great deal of capital may consider purchasing a sale lease back due to the relatively safe nature and respectable cash flow the investment provides.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that it is easy for investors to get overwhelmed by the different investment choices available. There are a myriad of real estate investment types ranging from buying and selling little family homes to owning stockpiles of commercial properties. Some of these investments are riskier than others, some more profitable than others, and some are better suited for certain classes of investors. For investors with easy access to funding, an investment that may prove quite profitable is a sale lease back agreement.

A sale lease back, as the name implies, involves the sale of a property whereby, the seller leases the same property they just sold. The buyer of the property earns an income from the lease payments. In the case of real estate, this type of arrangement typically involves commercial properties with rental spaces like offices, retail outlets, or apartments. The kind of property that typically gets sold in this way would be one that generates regular income by way of rents or otherwise.

Why would an owner want to sell a useful income-generating property just to turn around and assume the role of tenant? The most common reason is that the seller needs the capital. They may wish to expand their business operations but due to lack of funding, are unable to. By selling their property through a sale lease back, they can get the funds they need, without giving up control over the management and income stream it generates.

A common example of a sale lease back is the purchase of a planned community when it is still under construction. The developers would sell the property to raise the funds necessary for completion and once the project is completed, would rent out or sell the units to the public. The owning investors are then paid the agreed upon monthly rent according to the terms of the contract. The agreement usually takes the form of the buyer owning the property for a few years and then reselling it again to the seller. Developers would opt for this type of deal when credit opportunities are limited.

Sale lease back agreement requires investors to be well funded since the sale usually involves large-scale properties. Investors with such huge cash reserves as are required to fund one of such projects, may well invest those funds in a sale lease back deal since it results in a good cash flow and is a relatively safe investment.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties.  Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community.  In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction.  For more information, visit www.HomeVestors.com.

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