Residential Sale Leaseback in Texas
Do you want or need to access the equity in your home but don’t qualify for a traditional Texas cash-out loan or a home equity loan? If so, you can use a residential sale-and-leaseback transaction to sell your property for a fair price, lease it back for a fair market rent, continue to live in the house for a short or long period of time, and in some cases even purchase the property back in the future. Sale and Leaseback transactions are very common for commercial real estate but they are also available for residential real estate. We generally steer our clients to a Texas cash out loans, home equity loans or even a reverse mortgage, but if these options are not available we can sometimes help a customer with a sale lease back. With our Texas Residential Sale Leaseback offer, a client can sell their property and access their home equity, continue living in the home, and in some cases they can even buy the property back in the future.
With our Texas Residential Sale Lease Back Offer you can:
- Access your home equity
- Access more of your equity (since a Texas Cash-out loan only allows you to borrow 80% of your equity)
- Use the money to start a business or pay off debt
- Continue to live in your property (for a short or long term period)
- And in some cases purchase the property in the future
To get a quote for your home, please click “Get Started” or call us at 512-627-5263. We would love the opportunity to help provide you a you determine if a Texas sale lease back transaction is right for you.
Never Heard of a Sale Lease Back? Here’s Why!
Sale and leaseback transactions are actually very common in commercial real estate, but they are far less common for residential real estate. Sale and Leaseback transactions are not typically used in residential real estate because home owners have a number of other ways to access the equity in their homes such as cash out loans, home equity loans and even reverse mortgages. In most situations, these options are usually a much better option for a residential property owner.
However, a residential sale lease back can be a good option for home owners who want or need to access their home equity, continue living in the home, but can’t qualify for one of the above loan options. This can come into play when a home homeowner has substantial equity in their home, but their employment situation has changed by someone starting their own business (becoming self-employed), someone retiring or even someone going back to school. In these situations, a home owner may want or need to access their home equity and they still want to live in their current home and they may even want to repurchase the property back from the investor at some point in the future.
In addition, a sale lease back allows the home owner to access to more of your home equity, that has built up in their home, while a cash out loan caps the amount by requiring the homeowner keep 20% of their equity in their home. This is not something lenders can be flexible on – the requirement is set by Texas state law. You can follow this link to learn more about Texas laws governing cash out loans on our sister site.
Common Reasons for Sale Lease Back
Finance starting a new business or going back to school. When the home is sold to an outside investor, the home owner receives full value of the property whereas doing a cash out loan will only allow them to acquire 80% of the value of their property (since by law they need to leave at least 20% equity in their home when getting a cashout loan in Texas).
Pay Down Debt
Limit risk associated with owning real estate
Sell your home in advance of an expected move
Investor Advantages of Sale Lease Back
Fair return on their investment in the form of rent, and ownership of a depreciable property already occupied by a reliable tenant.
Long-term, fully leased asset with an income stream
Ability to invest in real estate with a tenant who is already familiar with the property and from a tenant who may want to re-purchase the home in the future.