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Smooth, automated closings for investors with options

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Hey,

 

I've had tremendous luck collecting options on properties that are below market and finding buyers. Great!

 

However, if I want to increase business I need a smooth, automated closing process. I can't handle being an investor and re agent and closing agent.

 

Anyone have a system they use that would resemble something like: "If it's something that can work for you, here's the paperwork you need to make an offer, give it to my closing agent w/ your deposit and we'll go from there." I need something confidence inspiring, and something that takes all the pressure off me. I need something that result in an S&P between buyer and seller plus an agreement that states I'm getting paid at closing. I

 

I've had Buyers who like the property, dug on the price, but the process is what kept them from picking it up. Argh.

 

Any input on putting together a smooth, automated closing process for an investor with options would be mega-appreciated.

 

Please, experiences of how to make a business out of discounted properties from a good investor would be invaluable.

 

**I've took a look into the option release contract. This could work but it doesn't solve the 'hands-off' part of the issue. Nor does it make a convenient process for taking a deposit, etc.

 

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Sorry I'm making this sound more complicated than it is.

I basically have no process to work with buyer w conventional financing. Working with cash-buyers is easy: assign the option, collect the fee, big easy. But when I have an assignment fee closer to $10 or $20k a conventional financing buyer wants this financed as well.

What I'm looking for is this: what's a simple way to flip an option to a buyer w conventional financing. And when I say buyer, let's talk about a person who barely knows anything about real estate (your typically SFH buyer). You know, the type of people who will probably purchase through a Realtor and pay top dollar because the Realtor will hold their hand through the process. How can I emulate that? How can I get the oil workers to spend all their money on my discounted properties that they like?

What sort of agreement do I need that will accept a deposit, provide an S&P that the buyer can use with their bank, and promise me an option release fee paid by the seller at closing?

How do I make this convenient for me and the buyer? Iv'e literally spent the last 2 weeks trying to find a solution for 2 different buyers for 2 different properties I have, both bringing conventional financing. It's a ******* mess and I'm burning time trying to figure this out. I need a smooth process so I can sign up 4 more options this week (not boasting) and 4 more the next week. My brand is HOT right now and I need to keep picking up these properties, but I need my paperwork together so I can work smoothly with conventional financing buyers.


Ideas???? Please???? Thank you!!!

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Nick, have you spoken with a real estate attorney or a title company? I would think the title company, especially, can walk you through the process. They want your business.

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You can also let the buyer's lender hold their hand through the process, letting the lender say what is needed to make things work.

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I picked up 3 options today, making my current count 5. Y'all are right, I must enlist the aid of professionals!!!! I'll let you know what I come up with!

 

check out what the guy over at phoenixwholesalehomes.com does. I think I need that but I gotta talk to an attorney to make sure I'm doing it right in my state.

 

Ive been watching that fellow for over a year now. He wholesales a pile of property.....

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I'm going with the flow. It's hard to collect lease options here. The problem is when people move away from here, they all go 1000 miles away and I'm just not having luck finding the people who want to do a lease purchase. And if they're not going 1000 miles away, then they just don't have the motivation it would take to stuff a tenant/buyer in there. I'm actively looking for lease purchase possibilities.

 

We've also got people totally fed up with Realtors and listings. It's like the Great American Option Round-Up over here or something. People come to me and I haggle for days before finally paying a dollar to control their property at a decent price.

 

Now, I'm wondering what luck I can have from wrapping up a pile of properties, then listing them with Realtors. I've been getting options for 60 days, plus 60 day extensions. I've got another one for half a year. It's just like, people are going to offer a decent price, and they are going to offer it to me during the heat of the housing season..... so it feels wrong not taking the chance for a dollar.

 

As I get better at wrapping up properties, I can then find other people to sell them. If I have a slick system where I can get offers ON PAPER. Then who gives a hoot what the option price says? If the homeowner is truly motivated, and I present an offer to them that I've had, they could be very willing to accept that offer and release my option for $2000 or something.

 

It's a weird situation but I feel like I need to capitalize off this warm Spring/Summer market. I feel like I need to be ultra creative and exploit what opportunities I've offered.

 

Let's hear your thoughts on this scheme.....

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I've always said those who fight the market are those who lose. In other words, take what the market is giving you. In your case, Nick, that appears to be Pure Options. In essence, you are wholesaling right now. Getting properties tied up at the lowest possible price and then finding someone who is willing to pay you more. But the advantage over the traditional approach to wholesaling is that you aren't required to put up any cash and aren't obligated to purchase the property, making it a risk free approach. But you must get these properties at a very good price or you won't attract any buyers on the other side, leaving you with a bunch of expired options.

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They are calling me me through my marketing. 3 of them are unoccupied, 2 occupied. You can check out my website at webuywy.com

 

The brand is solid. The marketing is committed.

 

Here's what I've learned over the last week: the closing process is all about the experts you work with. The "smooth, automated closing process" is something that is designed by the people doing the closing. I can't stay up all night writing legal documents and thinking deep when the whole goal is to get someone else to do it. Instead I have made phone calls to pros and they are telling me the way they want to do it in a simple matter. YA! That's what the answer is, as our first two responses indicated.

 

Crucial thanks for the direction.

 

In reference to my previous post, I'm actually going to toss most of the options I have now because they are junk. Too much hustle for too little buck.

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Here's what I've learned over the last week: the closing process is all about the experts you work with. The "smooth, automated closing process" is something that is designed by the people doing the closing. I can't stay up all night writing legal documents and thinking deep when the whole goal is to get someone else to do it. Instead I have made phone calls to pros and they are telling me the way they want to do it in a simple matter.

Exactly right!

 

 

In reference to my previous post, I'm actually going to toss most of the options I have now because they are junk. Too much hustle for too little buck.

 

The option price was too high? You've got to be offering value in the deal to find any takers.

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Agreed. Good deals sell themselves. With my lifestyle, I do better waiting out the good deals.

 

So here's the specifics of my closing process.

 

1. recognize that this is probably going to be a new things for everyone involved, so be a good, confident teacher and it'll all work out

2. I take a deposit. This deposit is called the deposit for assignment and it's an agreement that states I have taken a non-refundable deposit towards the assignment of my option. Then it includes a part where the assignee promises to pay me the rest by a certain date. I like this. If they drop the ball, I still got an agreement where they promise to pay me out. In essence, what this document does is clouds my option so buyer and seller can get busy.

3. then I wrote my own sales and purchase for the seller and buyer to use. I referenced the Hidden Secrets of a Real Estate Technician to make sure I didn't miss anything, then used a pile of legalese available in MC's contracts. It generated a rather fair and simple purchase contract that protects me as the preparer.

4. Then I used the option release agreement provided on these forums by Jack Johnson between me and Seller which spells out they are going to pay me out to release my option. I REALLY like this. Technically the seller is agreeing to pay you out regardless of expiration of the option. KINDA COOL!

 

And banks like it this way.

 

The longer story: on my first deal like this I was dumb enough to say this to my assignee: "Ya sure, get a lawyer to prepare the documents and I'll split the cost with you." This is after I handed him an option release agreement. So ya, what do you know? Lawyer costs us $1200 total. $600 to add a sentence to the option release agreement. $600 for a Sales and Purchase agreement. Mother *********. Can you say "ripped off?" If this assignee wasn't a personal friend....

 

Before I even went to that closing I lined up another deal where I wrote all the documents myself. I just made sure to be very clear with everyone that I wasn't provided them with legal advice or anything like that. "I'm trying to make a buck and the only way for that to happen is if you nitwits use a contract, and this one is free so do whatever you want." I'm realizing that I am smarter in options than any of our local lawyers that I know of.

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I use a release with MC's recorded Memorandum and they are great tools to stay in control of my interest in the deal. The only issue that I see in your post, and you probably have it under control, is preparing legal docs for others. Congrats on the deal!

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I'm realizing that I am smarter in options than any of our local lawyers that I know of.

 

I'm not surprised, Nick. B)

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