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fanelli19

CA Paperwork

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I've seen someone that does the CA a little bit different when it comes to the paperwork:

 

He gets a flex option contract that states that he has the option to buy on a lease purchase. It is a simple one page document. This document says that when he exercises his option to purchase he is going to enter into a contract with a T/B and then assign this contract over to the original seller.

 

This seems easier to do because then you do not have to explain how you are going to mark up the purchase price of the seller's home in order to be compensated from the down payment.

 

For example: seller wants 145K for the home and you do your comps and come up with 145K as the market value. You explain what you do to seller and give him the simple flex option contract for 145K. Find a t/b who has $5K down. You enter into a lease option agreement and rental agreement with T/B and collect $5K for downpayment. You collect 1st months rent, give to seller along with the paperwork and you're gone!!

 

What do you think of this way of doing the CA? Is it easier or is it asking for trouble?

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So, isn't the seller only receiving $140K in luie of the $145K agreed to? I don't know the Flex agreement, but it sounds like you are acting like a real estate broker when taking a down payment or earnest money. I sell my deal with the seller and not the house. I don't know if I would use the Flex agreement, but then I haven't seen the agreement either.

 

my2cents :blink:

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I've seen someone that does the CA a little bit different when it comes to the paperwork:

 

He gets a flex option contract that states that he has the option to buy on a lease purchase. It is a simple one page document. This document says that when he exercises his option to purchase he is going to enter into a contract with a T/B and then assign this contract over to the original seller.

 

This seems easier to do because then you do not have to explain how you are going to mark up the purchase price of the seller's home in order to be compensated from the down payment.

 

For example: seller wants 145K for the home and you do your comps and come up with 145K as the market value. You explain what you do to seller and give him the simple flex option contract for 145K. Find a t/b who has $5K down. You enter into a lease option agreement and rental agreement with T/B and collect $5K for downpayment. You collect 1st months rent, give to seller along with the paperwork and you're gone!!

 

What do you think of this way of doing the CA? Is it easier or is it asking for trouble?

 

 

fanelli19,

 

Out of curiosity, who or what program is using that contract. Feel free to message me off the board if you would like.

 

Thanks,

 

TAT

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The flex options come from a real estate investor guru name Tim Mai. How it works is this: You approach a seller or even a wholesaler and tell them you have end buyers that are interested in the property they have. You have them sign a flex option contract which allows you to market the property to your end buyers but still gives them the right to continue to market the property. Once you have an end buyer you can nodw turn the flex option into a standard PSA contract.

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Yea Ok, don't know a lot about him and there are 10 ways to skin a cat. I'll stay with my naked agreements. I mean, why reinvent the wheel, when you have something already tried and true and that's just as easy? Not to mention that I am protected and I know that I am doing my deals the right way.

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An option agreement can be used for just about everything. In essence it is a bundled of rights on a piece of paper. MC you are right. Take a name. Dress it up and charge $1,497 not to include a 5 day bootcamp.

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Take a name. Dress it up and charge $1,497 not to include a 5 day bootcamp.

"There a sucker born every minute." - P.T. Barnum

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So, isn't the seller only receiving $140K in luie of the $145K agreed to? I don't know the Flex agreement, but it sounds like you are acting like a real estate broker when taking a down payment or earnest money. I sell my deal with the seller and not the house. I don't know if I would use the Flex agreement, but then I haven't seen the agreement either.

 

my2cents :blink:

 

 

I think what this guy does is screens his calls to see what buyers have what to put down. This way he is not changing the price around due to one buyer having 3K but another having 8K, etc...So lets just say he finds a buyer that has $5K to put down and the guy is approved. He then turns around and draws up the lease option agreement with the t/b at $150,000.00 and collects the option money as his fee. He then assigns the deal to the seller who then has a t/b who owes 145K (giving the seller exactly what he wanted). This way, you are not doing any upfront explaining to the seller on how you get paid and marking up his asking price/market value for you to earn your fee. I think that this method would be a lot easier to do, especially in your up front negotiations on price with the seller. You would end up doing exactly as you promised, you gave the seller a buyer at 145K and the buyer paid you for this. Otherwise, signing this up with the seller at 150K and then getting a buyer who only owes 145K because you took the money seems like it would confuse the seller and cause him to look elsewhere or realize that you are no different that a realtor who is taking money out of the sale. That is my opinion at the moment and in my brain it would work better; but until I do a deal, I may be wrong.

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I've seen someone that does the CA a little bit different when it comes to the paperwork:

 

He gets a flex option contract that states that he has the option to buy on a lease purchase. It is a simple one page document. This document says that when he exercises his option to purchase he is going to enter into a contract with a T/B and then assign this contract over to the original seller.

 

This seems easier to do because then you do not have to explain how you are going to mark up the purchase price of the seller's home in order to be compensated from the down payment.

 

For example: seller wants 145K for the home and you do your comps and come up with 145K as the market value. You explain what you do to seller and give him the simple flex option contract for 145K. Find a t/b who has $5K down. You enter into a lease option agreement and rental agreement with T/B and collect $5K for downpayment. You collect 1st months rent, give to seller along with the paperwork and you're gone!!

 

What do you think of this way of doing the CA? Is it easier or is it asking for trouble?

 

 

fanelli19,

 

Out of curiosity, who or what program is using that contract. Feel free to message me off the board if you would like.

 

Thanks,

 

TAT

 

TAT and Lynn FL, I sent you both a message off the board

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Guest jvmccall

I use a one page "flex option" contract and I love it. I call it an "Option to Lease Option". I still like what MichaelC does and how everyone else on this board does it. Both methods have their benefits and drawbacks in my opinion. Keep this in mind - if it ain't broke, don't fix it!

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It sounds like a Pure Option with a twist on the name so it can be marketed as something new.
fanelli19, this is a "Pure Option" which is one of the Naked Investor techniques. They are as simple as you state.

 

Tim Mai is in Texas where long term L/Os are all not legal. So, SLOs and CAs may or my not work well. But you can do a 6 month option. A "Pure Option." It's all in the Naked Investor Manual.

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