Standard Options
What Is A Standard "Option"
By the word "Option" we are now talking about having the right to purchase a property without leasing, as we just discussed. The option agreement simply states that you as the optionee have the right to buy the property from the seller who is the optionor, within a specified period of time. During the option period, you won't be making the seller any payments other than a small one time option fee.
Your Objective
Your objective when using
this strategy is to get a seller to give you an option to buy their property
below what the market value is. Then, resell the property to one of your buyers
at market value and put the difference in your pocket.
No Real Estate License Required
You are not required to
have a real estate license to do this because the option agreement gives you an
equitable interest in the property. In fact, none of the techniques taught in
this course require a real estate license.
Control With Little Or No Money, Or Risk To You Or
The Seller
By knowing how to
approach a seller, you can use options to take control of beautiful houses, in
beautiful neighborhoods, using virtually no money. You do not put the seller at
any risk or require them to even take their house off the market, and you do
not have to make monthly payments while you are trying to sell the house. The
seller can retain the right to continue to try to sell the property and if the
seller sells the property before you do, you simply go on to the next deal and
the seller owes you nothing. If you do sell the property before the seller
does, the seller simply sells the property to you at the price you both agreed
on. There is no way the seller can lose and you as the investor can make huge
profits with virtually no risk or costs as well.
Once you and the Seller
have decided on a price, you have seen the property, and been given an option
to buy, you will start sending your
buyers by to look at the property. These buyers should be fully capable of
qualifying for a bank loan, including having the necessary down payment.
Types Of Property To Invest In
When it comes to the
types of property to invest in, it is best to option houses that are vacant but
it is not an absolute necessity. It just makes it easier to show the property
to your buyers without the possibility of the seller being present which would
most likely cause the buyer to start asking questions. The only concern to the
buyer should be how much they are paying for the property and the fact that at
closing, they will get a clear title to the property.
The properties should be
in very nice neighborhoods where qualified buyers are looking to buy in. The
properties should also be in virtually excellent condition as well.
Advantages Of Using Options
Using options to invest
in real estate has several advantages.
No Risk
The biggest advantage is
that there is virtually no risk to you or the seller, and the seller does not
have to take their house off the market. On top of that, if the seller sells
their house before you exercise your option, the seller owes you nothing.
Realize, because you are
not even asking the seller to take their house off the market, you will only be
giving them what ever the minimum option fee that is necessary to make the
contract legal in your state. This usually ranges from one dollar to one
hundred dollars. Even then, your option agreement can state that if the seller
wishes to cancel the option because they found a buyer, they can simply refund
the option fee to you.
Deal In Nice Houses And Buyers Who Can Qualify
With this technique, you
can take control of very nice houses in very nice neighborhoods without
absolutely any risk to you or the seller. Don't forget, because you'll be
giving extremely small option fees to the seller, it won't cost any more money
to option a $100,000 house than it will to option a $500,000 house. And the
higher the value of the property, the more money you can make.
Disadvantages Of Options
Because you have little at risk when investing using options, there aren't really any disadvantages except one, and that is ... you must find a buyer who can pay cash or qualify for a bank loan. You also might spend a lot of time trying to sell a property, only to have the owner sell the property just before you do.
