The Pure Option

[Dustin 0]

Hi all,

 

I was considering doing a couple "pure option" deals to get a little bit of business income going. I know I would be willing to even assign the option for 500 bucks to a fellow local investor where the numbers are marginal. The amount of conversation and educating to the homeowner is substantially less than other deal structuring and it would be much easier to perform given the time restraints I have.

 

Now, that being said, I can lock the property for 30 to 60 days Im sure (I can assign it in an hour if the numbers are right). So, for a home that needs no repairs and is in a rental type neighborhood, whats the best way to go about negotiating that purchase price down to a range where I can easily assign the contract to another investor(preferably)/homebuyer? Please don't tell me 70% of FMV because houses here range from 50K up to 200K in better parts of the city.

 

Would you buy a 55K FMV home for 45K if your an investor who likes to buy and hold knowing no major repairs are needed and its rent ready?

 

I want to structure a couple quick cash deals and trying to get my ducks lined up !

 

Thanks in advance,

Dustin

[MichaelC 160]

Would you buy a 55K FMV home for 45K if your an investor who likes to buy and hold knowing no major repairs are needed and its rent ready?

The answer depends upon the local market. Who's controlling the market these days? Buyers or sellers? Will the property cash flow for the end buyer if that buyer is an investor looking to buy and hold? How easy is it to attract good tenants in the area? I think these are determining factors as to whether or not you've got a deal that can be moved quickly. Ultimately, the market will tell you if you're on to something. And with a Pure Option, you have little to lose except for some marketing dollars and your time.

[Jonathan RexfordFL 8]

As an investor, I would not do it just because there is no equity at all. Now with that said you may find an owner occupant that will buy your a property under an assignment of option.

 

Don't limit yourself to one way of investing with options. You can control the world with options and it allows you to move and move out of a transcation.

 

You can"

 

Option to Lease Option

Option to Buy Subject too

Option to Short Sale

Option to Buy all Cash

Option to Buy on Agreement for deed (Contract or Land Contract)

 

Options are wonderful.

[Dustin 0]

Thanks Guys. I think what I need to do is keep these different strategies in mind and just get the appointment with a seller showing some motivation. The sky will be the limit at that point.

[Gentillionaire 0]

As an investor, I would not do it just because there is no equity at all. Now with that said you may find an owner occupant that will buy your a property under an assignment of option.

 

Don't limit yourself to one way of investing with options. You can control the world with options and it allows you to move and move out of a transcation.

 

You can"

 

Option to Lease Option

Option to Buy Subject too

Option to Short Sale

Option to Buy all Cash

Option to Buy on Agreement for deed (Contract or Land Contract)

 

Options are wonderful.

 

Have you done Short Sales using options?

[Jonathan RexfordFL 8]

Yes. I closed one last month and I have 5 others that I am trying to sell.

[Brian - L.V. 0]

Yes. I closed one last month and I have 5 others that I am trying to sell.

Hi Jonathan,

 

I was actually going to ask you about this since you mentioned it in a short sale post I did a few weeks back. How would an option to short sale work vs. a short sale? Thanks for your help!

[Jonathan RexfordFL 8]

I had an option with seller.

 

Short sale approved.

 

I bought the home.

 

I am doing the rehab as we speak.

 

If I was to flip it it would be the same thing except that I would FUND the closing with my funds and then do the take out later that day with buyers funds or 5 minutes later if seasoning was not an issue.