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📌 What This Post Covers:

• What seller leaseback and buyback option deals are
• Why sellers and investors may consider them
• Real-life example of how it plays out
• Key benefits and risks involved

⏱ Estimated Reading Time: 5–6 minutes

🔍 Highlights – Main Takeaways:

• Seller Leaseback: Seller sells their home but stays as a tenant under a lease agreement.
• Buyback Option: Seller gets the option to repurchase the home at a pre-agreed price within a set timeframe.
• Why Sellers Agree: Often due to financial hardship or impending foreclosure—this gives them stability and time.
• Investor Benefits: Immediate rental income, potential for strong equity growth, and flexible exit strategies.
• Real-World Warning: There’s a strong chance the seller won’t follow through, meaning you retain the property and gain more equity.

🏠 Seller Leasebacks & Buyback Options – A Smart Creative Twist

By Dani Beit-Or

Welcome back to part two of our series on Creative Real Estate Deals. If you haven’t seen part one yet, where I covered “subject-to” deals, be sure to check that out first—it lays the foundation for today’s discussion.

In this post, we’re going deeper into the world of creative financing and exploring two powerful variations: Seller Leasebacks and Buyback Options. These strategies may not be new, but they are increasingly relevant in today’s market, especially for investors looking to unlock unique opportunities and strong returns—without relying solely on traditional buying methods.

🔄 What Is a Seller Leaseback?

A seller leaseback is when the seller sells their home but doesn’t move out. Instead, they lease the property back from the buyer (you) for a pre-agreed rent and term—typically one or two years. This arrangement gives them continuity, especially helpful if they’re in a tough financial spot but want to stay in their home or keep their kids in the same school district.

The lease is formal, with a standard lease agreement, rent amount, deposit, and lease term just like with any tenant.

Investor Benefits:

• Immediate rental income
• No vacancy risk
• Stability in transition

🔁 What Is a Buyback Option?

A buyback option adds another layer: the seller has the option to repurchase the property from you in a set time (usually 1–2 years) for a pre-agreed price. For example:

• You buy the home for $250,000
• It’s worth $300,000 today
• The seller leases it back and has the option to buy it from you in 2 years for $300,000

If they execute the option, you walk away with a nice profit. If they don’t, you retain the home—and potentially with even more equity.

Most likely outcome? The seller doesn’t follow through, and you keep the home, rent it at market rate, and enjoy a nice boost in value.

🛠 Real Deal Example

In one of my recent transactions, I purchased a home, offered the seller a leaseback and buyback option. Within 3 weeks, the seller fell behind on rent. I’m now in the process of eviction.

While that’s not ideal, it’s not a deal-breaker—I now get to rent it out at a higher rate and retain the full equity.

⚠️ Key Considerations

• These deals take work—they don’t just fall into your lap. You must structure them carefully.
• The seller’s financial hardship often drives the deal.
• Make sure terms are crystal clear—especially with the buyback option. Define timelines, prices, and what voids the agreement (missed rent, etc.).
• As the investor, you take on some risk but also gain major upside potential and flexibility.

Final Thoughts

These leaseback and buyback deals are not for beginners, but with the right structure and understanding, they can be a win-win—offering sellers a lifeline and investors a profitable opportunity.

Stay tuned for part three of this creative financing series!

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