It's a Lease-Option Agreement, typically between the Home Seller and Proxima Investors, who turn around and simultaneously mirror and replicate the deal with a third-party homebuyer. Proxima Investors' buyer takes possession, but Proxima Investors is responsible towards the Seller until the end of the MLP contract.
It's Mediated because Proxima Investors are the main tenant-buyers throughout the transaction and deal until the final Purchase & Sale and the party directly responsible towards the Seller.
It's Lease-Purchase as it works in a similar way to a Lease until the final Purchase, in compliance with the Lease-Purchase agreements that are linked to the same property.
Proxima Investors have direct contractual relationships with the Home Seller and with the Homebuyer separately. There is no direct contractual relationship between the Home Seller and the HomeBuyer. That's how Proxima Investors are a buffer or a shield for the Sellers; they are the mediating investors and answer to the Home Seller, while the End-Buyer answers to Proxima Investors.
There are typically monthly payments for the Use & Occupancy of the property, a term of expiration of the agreements, rules for the maintenance and upkeep of the property, and a final date for the Purchase & Sale.
In the industry, variations of a Mediated Lease-Purchase can be found to be called Sandwich Lease Options, but at Proxima Investors these deals have a defined framework that doesn't always perfectly match the type of deals that other real estate professionals and operators may do.
Lease-Options in general are a broad category that includes many variations, and a Mediated Lease-Purchase is just one of them. It may suit some Home Sellers and Buyers, but not others. Statistically speaking, it's one of our most popular formulas, as it offers many of the pros of lease-options, without the responsibilities and effort. Since these responsibilities are very limited in lease-options compared to other real estate transactions like long term rentals, or labor-intensive transactions like short-term rentals, we are more than happy to stay involved in this type of deal as long as we set them up. We do not take over others' deals, as we do not have the comfort and reassurance that they were set up properly. Since in a Mediated Lease-Purchase we are responsible towards the Seller, the deal needs to meet our minimum standards of comfort and security.
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