Business Strategy : Pure Optiion

[lhenley 8]

HA! I don't know about that! But if it looked like the numbers worked, a pure option is, in my opinion, a good tactic to stick the toes into the water with.

BTW- I didn't reserve the house in Dune Allen this year for the 4th of July, so we may not go to Destin for the first time in 18 years!

 

 

John,

 

One "guru" out there tells you to get an option on upper-end properties for $10, then do a round-robin type auction to sell.

 

That's too bad. The tar balls are gone, so come on down.

 

Lynn (FL)

[MichaelGibson 0]

I have a Pure Option with a seller. I have a prospective t/b and the seller is ameniable to a lease option. Can I facillitate a C/A between the seller and t/b (with me collecting what would normally be an assignment fee) without me being the t/b and assigning my interest to my t/b since I already have an option on the property? Or by doing this, would I simply be using Strategy 4 in the NI manual of being a consultant and charging a fee?

[MichaelC 160]

Michael, if I understand correctly, it seems to me it would be easy enough to tear up the Pure Option Agreement and just run with the CA. Pocket the assignment fee/option consideration and call it a day.

[MichaelGibson 0]

Michael, if I understand correctly, it seems to me it would be easy enough to tear up the Pure Option Agreement and just run with the CA. Pocket the assignment fee/option consideration and call it a day.

I believe you understood my question correctly. Hadn't thought about the possibility you set out...but that works perfectly. Thanks!

[birtane 0]

Good job, Michael.

I like this approach to Pure Option. So when u talked to the owners at the beggining did u tell them you are not end buyer?

 

You said the pure option agreement is non-exclusive. Is it the same for CA??

 

Thanks

[MichaelC 160]

Both approaches can be non-exclusive, or not. Generally, I will do a Pure Option as a non-exclusive arrangement because it is the rare homeowner who will take their house off the market because he gave you an option to purchase on it.

A CA can go either way, depending upon the homeowner and, I suppose, your ability to sell your competency to get the deal done sooner rather than later.

[MichaelGibson 0]

The way people view things sometimes amaze me.

 

I entered into a pure option with a seller about 30 days ago. Friday, I took him a 36-month LP offer with the view of doing a CA. As soon as he heard the word "lease", he started backpeddling FAST. I told him that I would go back to the drawing board and see what else I could come up with that might work for him.

 

This afternoon, I took him a Contract for Deed with a balloon in 36 months...and he signed it!

 

I will now assign that Contract for Deed and make the same amount as I would have on the CA.

 

In hindsight, I think I like this strategy. A Contract for Deed seems more permanent to a seller than a "lease"...and more permanent to a buyer.

[MichaelC 160]

. . .A Contract for Deed seems more permanent to a seller than a "lease"...and more permanent to a buyer.

I think you're right. Perception is reality, Michael. Nevertheless, congratulations on doing the deal.

[MattF 0]

The way people view things sometimes amaze me.

I agree. Kudos for repackaging your solution into a perception that everyone could work with. Great job!

 

Aloha,

Matt

[Chad533 1]

I like this idea and I agree, I think many of the people I am emailing freak out when the see the word lease. My question is what are the main differences between a Contract for Deed verses a CA? Are they basically the same? Are there drawbacks over one verses the other?

[DeeLight 8]

I second this question---what's the diff? Advantages----disadvantages??? I am allllways open to new ways to get my dear sellers to get past the fear. Heh, now if I can just get past mine :lol: