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When I get an option on the property I always record a memorandum. Since I have the authority to BUY and SELL I have a contract in place with Seller. When it goes to closing the Memorandum has to be cleared up (released) That is my release fee and it shows up on the seller side of the HUD.

 

Jonathan, this thread is incredible! I have a lot of sellers who are agreeing to give me option to buy for 30 or 60 days. I just started and it seems to be easy hetting options to buy. Now I have to find buyers fast!! I would appreciate if you would correct me if i misunderstood your method (please note my questions in parenthesis). Thank you.

 

You enter an option to buy with a seller and both of you also sign a memorandum. (Have you ever had a seller who is reluctant to signing the memorandum? If so, what do you do?) (Is the option agreement non-exclusive or exclusive? I would think "exclusive" because you are putting a cloud on title.) Then, you immediately record the memorandum. Then you turn around and auction (or put up for sale) the house for let's say $25K profit. You let the buyer and seller enter a purchase contract with price that $25K above your option price. (How do you get the buyer to agree on the inflated price in order to enter a purhcase contract? How does it work?) No assignment of option here. (Correct?) Title company sees your memorandum and puts in the HUD on the seller side (Why not the buyer's side since he/she is getting the mortgage?). You sign a release for a $25K fee from seller. (Again, why not from buyer?)

 

Do you have any other methods of marketing (advertising) that is either free or nominal? If so, please share if you do not mind. In fact, I have a motivated seller (of over $1,000,000 house with $200,000 profit) who will give me the option to buy (non-exclusive). i understand that I would not be able to assign the option to a buyer for $200K fee. Therefore, the recorded memorandum and letting buyer and seller enter purchase contract takes care of the $200K fee at closing. Thank you for your input. :D

 

 

:P

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Robert,

 

I get the memorandum signed but sometimes I do not record. I get the buyer to buy because that is what the house is worth. The buyer signs the contract with new price and it goes to title company. I give the title company my option agreement to cancel the agreement so the seller can close with the buyer. I am paid on buyers side of hud. If you have any questions just give me a call.

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Hi Jonahton, sound interesting. I have seen a few of those signs around here in Daytona.

 

Have you have any of the sellers upset that you are getting so much money on the deal??

 

Do the sellers have a way out of it if they see how much money you are making??

 

Thanks

EastCoastGirl

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Robert,

 

I get the memorandum signed but sometimes I do not record. I get the buyer to buy because that is what the house is worth. The buyer signs the contract with new price and it goes to title company. I give the title company my option agreement to cancel the agreement so the seller can close with the buyer. I am paid on buyers side of hud. If you have any questions just give me a call.

 

Jonathan, when the buyers signs the contact with the new price, is he signing a new contract with the sellers,(and you are on the sidelines with your memorandum) and the sellers do not have a problem with that?

 

Is there anything on the contract or with this process that would raise a red flag to the lender that the borrower is using? :wub:

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Hi Jonahton, sound interesting. I have seen a few of those signs around here in Daytona.

 

Have you have any of the sellers upset that you are getting so much money on the deal??

 

Do the sellers have a way out of it if they see how much money you are making??

 

Thanks

EastCoastGirl

 

NO AND NO

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Robert,

 

I get the memorandum signed but sometimes I do not record. I get the buyer to buy because that is what the house is worth. The buyer signs the contract with new price and it goes to title company. I give the title company my option agreement to cancel the agreement so the seller can close with the buyer. I am paid on buyers side of hud. If you have any questions just give me a call.

 

Jonathan, when the buyers signs the contact with the new price, is he signing a new contract with the sellers,(and you are on the sidelines with your memorandum) and the sellers do not have a problem with that?

 

Is there anything on the contract or with this process that would raise a red flag to the lender that the borrower is using? :wub:

 

Buyer signs new contract with seller. I rarely get a memorandum. No to second question

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When I get an option on the property I always record a memorandum. Since I have the authority to BUY and SELL I have a contract in place with Seller. When it goes to closing the Memorandum has to be cleared up (released) That is my release fee and it shows up on the seller side of the HUD.

 

Is it a flat fee when you guys record a memorandum or does it vary depending on your contract sales price?

 

I ask because it's normally $15 to record a the 1st page of a document at our deeds office, and I thought to myself let me record a memorandum on an upcoming deal. My memorandum referred to the property as "exhibit a attached hereto and made a part hereof by reference." After the receptionist asked to see exhibit a and saw the sales price she started calculating the taxes on the contract price and asked for $50. Now the price of course is irrelevant but I know it doesn't take much to figure out the sale price by doing the tax calculation in reverse.

 

Am I over thinking this?

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When I get an option on the property I always record a memorandum. Since I have the authority to BUY and SELL I have a contract in place with Seller. When it goes to closing the Memorandum has to be cleared up (released) That is my release fee and it shows up on the seller side of the HUD.

 

Is it a flat fee when you guys record a memorandum or does it vary depending on your contract sales price?

 

I ask because it's normally $15 to record a the 1st page of a document at our deeds office, and I thought to myself let me record a memorandum on an upcoming deal. My memorandum referred to the property as "exhibit a attached hereto and made a part hereof by reference." After the receptionist asked to see exhibit a and saw the sales price she started calculating the taxes on the contract price and asked for $50. Now the price of course is irrelevant but I know it doesn't take much to figure out the sale price by doing the tax calculation in reverse.

 

Am I over thinking this?

 

This is what I have been using for the last 12 years.

 

NOTICE OF PURCHASE AND SALE AGREEMENT

 

STATE OF

COUNTY OF

 

A PURCHASE AND SALE AGREEMENT has been made and entered into this ______ day of _______________________, 20_____, between ___________________________________________________, hereinafter referred to as “Buyer”, and _______________________________________________________, hereinafter referred to as “Seller” (the words Buyer and Seller to include their respective heirs, successors and assigns where the context requires or permits).

 

WITNESSETH THAT: Buyer and Seller, by these presents hereby acknowledges the validity of a contract entered into of even date for the Purchase and Sale of the real property which is described as follows:

 

 

(Insert Legal Description)

 

 

 

The closing of the sale and purchase of said real property is to take place pursuant to the terms of the Agreement entered into of even date herewith. Any interested party may contact: ___________________________________, whose mailing address is __________________________________________________________, and whose telephone number is (_____)______________.

 

ALL PROSPECTIVE PURCHASERS BEWARE, Buyer has an equitable interest in the herein described real property by virtue of a properly executed contract. Buyer is, and has been, ready, willing and able to close this transaction.

 

IN WITNESS WHEREOF, the parties hereto have signed and sealed this Notice, the day and year first above written.

 

Signed, sealed, and delivered in the presence of:

 

 

 

____________________________________(Seal) _______________________________________________(Seal)

Witness Buyer: (Print or Type Name) _________________________________________________________

 

 

____________________________________(Seal) _______________________________________________(Seal)

Witness Seller: (Print or Type Name) _________________________________________________________

 

 

____________________________________(Seal) _______________________________________________(Seal)

Witness Seller: (Print or Type Name) _________________________________________________________

 

 

 

____________________________________

Notary Public

 

(SEAL)

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