You have some big financial goals, but they require a lump sum of cash. If you want to secure a new build or buy an existing property, having cash in hand will make you the most competitive with your offers. So what do you do when you want to grow your portfolio by using equity but not lose access to your home?
If your home or another one of your investments has grown in value, you can cash out by doing a “sell and stay”. This way of getting a fast lump sum of cash is growing in popularity, especially with high-value real estate assets. Marketplace Home’s unique Sell and Stay program helps property owners get the cash they need while fixing their lease to an affordable monthly rate. How can this program help you reach your financial goals?
Capitalize on Rising Equity
New home prices continue to rise — even in the face of a cooling market — due to unprecedented demand. The low inventory situation isn’t going anywhere anytime soon either, which presents a unique opportunity to cash in on higher-than-normal real estate values. This is where we come in.
Marketplace Home’s “Sell & Stay” program helps buyers sell their existing homes and stay in them at good rent prices, which are locked in until they are ready to move on to the next thing. Since leasebacks are typically for the long-term, they are suited for situations when the seller must stay put for a while, such as waiting for a new build to be complete.
Why Cash Down is a Must for Today’s Buyers
If you plan to buy a property in this competitive market, you need to eliminate as many contingencies as possible. An offer that depends on a pending sale for cash also makes the financing contingent — which are “risk factors”. These days, sellers lean toward the cleanest offer given to them to make sure everyone is clear to close. If you’ve been frustrated by having your offer turned down due to contingencies, a sale-leaseback can be your ticket to stand out and get your offer accepted.
By having a lump sum from a sale-leaseback, you can cover the bulk of the down payment or supplement the rest of your funds to make a full cash offer. This eliminates contingencies and puts your most competitive offer forward. This can benefit individuals in a variety of ways, meeting a broad range of investment goals— from personal home ownership to growing an investment portfolio.
Taking a Closer Look
Leasing back your home is a creative way to secure financial assets conveniently. A “Sell and Stay” can help you relocate or meet financial goals without disrupting your life. This agreement makes it possible for the buyer to lease the property back to the seller. The terms of each leaseback differ, with some including clauses where the seller has a chance to buy the property back in the future. Here are the specific steps to the process.
- The owner officially sells their asset to the other party.
- Both parties sign a rent-back agreement where the buyer agrees to lease the property to the seller for a certain term. Repurchase conditions may be part of this contract.
- The seller gets the equity to fund whatever they need. This money helps buyers make more competitive offers.
- During the lease, the seller, who is now the tenant, pays the agreed lease price to the new owner. If a repurchase agreement is in the contract, then the new tenant works toward that goal.
How Cashing Out Can Help You
Does this sound familiar? Five buyers fight for the same lot the minute the boss releases it. With Sell & Stay, you can say, “I’m working with MPH. We’re under contract and I can guarantee that my first buyer is moving in. It’s not falling through.”
Doing a sale-leaseback can assist you when you’re in a pinch like this. This option can also help in many other ways.
- Provides Builders an Advantage: Builders are providing the fresh inventory homebuyers need in this tight market. A leaseback is a powerful tool because it allows buyers to move quickly on a new construction and allows home builder reps to secure deals in the face of limited inventory.
- Buyers Don’t have to Stress When Waiting for a New Build: A sale-rentback doesn’t just give buyers of new builds cash to close, but it also allows them to live affordably in their previous home until their new home is completed. This equity also allows them to close fast and make the most competitive offer that isn’t based on too many contingencies. The builder will be more likely to take the contract that doesn’t hang on too many unknowns, meanwhile, the buyer can take advantage of the best interest rates since they can put more money down and pay down their interest rate.
- For Buyers of Fixer-Uppers: The timing between the closing date and moving into a new home can be too close for comfort when there are repairs to be made in the next home. However, a leaseback can buy the seller enough time to comfortably work on the new home while living affordably in their previous home. Having extra cash to flip the new home is icing on the cake.
- For Investors Who Need Cash ASAP: A lump sum from a sale-leaseback can give an investor the money required to close on another property. The investor can also live in their old home and not waste time looking for another place to live. By including a buy-back clause, the seller can also get their old home back under certain conditions, which ultimately brings it back into their portfolio.
- For Anyone Who Plans to Travel Long-Term: If you crave freedom and want to be free from the responsibility of maintaining your home, then a sale-leaseback can be the answer for you. Not only do you get a lump sum of cash to do with as you please, but you aren’t responsible for your property anymore and can plant your roots elsewhere — when you’re ready of course!
A Confident Future
Selling while prices are high is a win for anyone who has built enough equity to make their next big financial move. According to builder surveys, the industry is experiencing greater delays in building homes than they’ve been in the past. Sell & Stay gives everyone the confidence they can still close in the face of whatever economic nightmare is unfolding in the media this month. Think about it as a hedge against supply chain issues — and we’re here to help you every step of the way.
Sell & Stay with Marketplace Homes
A leaseback can be the right financial solution for investors who need fast cash without experiencing interruptions. If you need cash fast to meet a new goal or simply save up your nest egg, a sale-leaseback can give you the assets you need. Contact Marketplace Homes today to get connected with our robust network of investors.
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