by Jackie Lange March 10, 2011
During a recent teleseminar, I explained how you can turn any purchase contract in to an OPTION by simply inserting one sentence. The sentence will state that something has to happen in the future before you will close.
Here are some
samples of what that "something" could be:
-you have to find financing within 60 days
- you must to find a tenant for the property
- you need to get approval from your partner
- the house has to be inspected and you have to approve
- the zoning
has to be changed and approved
- you must be able to market the property and find another buyer before you close
- etc etc etc
Your Option contract will control the property while you're waiting for that "something" to happen in the future. So the Option buys you time...time to find a private lender...time to find someone else to sell the house to for a profit...time to find a tenant before you close...time to get help to make sure you are doing the right thing.
An option could last for a few weeks or for many years. It's what ever you and the seller agree to.
There are many advantages in turning every Purchase Agreement in to an Option. The biggest advantage is that the Option will reduce your risks. Until you can secure the "something" that you added to the Purchase Agreement you don't have to close.
And, even more
importantly, if you CANNOT secure that "something," then you can get
out of the deal completely. That's what makes an Option contract risk free.
There are many other uses for Options.
When I first
got started, I used an Option contract to control wholesale properties while I
found a buyer. The typical turn around time was 7-14 days with a $3,000- $5000
profit; sometimes much more. To sell wholesale properties quickly, you need to
constantly be adding to your buyers list.
Once I got really good at getting Options on wholesale properties, I started selling 10-30 properties or more in one weekend on a MAGIC BUS. With my MAGIC BUS tours, I'd have 40-50 buyers on the bus. We would drive to each property and the buyers would submit a bid. The property was sold to the highest bidder. It is a fun (and very profitable) weekend for all.
Options are not
just for wholesale deals.
I've used Options to control nice houses, even multi-million dollar properties, while I did the marketing to find a buyer. Sometimes I use a Highest Bidder Sale ( like an auction) to sell and sometimes I just did aggressive marketing. When I find a buyer I'd make a lot of money. If I could not find a buyer I had no obligation to buy the house because I was using an Option.
Options are not just for properties that will be bought for cash. You can use Options with seller financed properties or subject to deals too.
You can even
use Options when selling.
To learn more, listen to the replay of the Options for Dummies teleseminar for a better understanding of how you can, and should, use an Option in every transaction. It's available now at www.CashFlowDepot.com in THE DEPOT.