maybe ask a few questions 
So hello everyone, I am a wanna-be beginner REI. I have been reading this book written by Robert Shemin Esq., really good real estate investing book. So here is the deal: I am a full time employee and a full time senior at a local university so naturally I have little time on my hands for anything else, however, I read in this book that Option to buy contracts are a good way to make money. It dos say that they are illegal in some state and I should check in mine to see if it is. I am in Texas so my Questions are:
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Is Option to buy contracting legal?
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Is it safe to go off of Tax value when negotiating on price or is there another way to determine āmarketā value?
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What is a reasonable price/percentage to sell the contract for?
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Am I able to do this through realtors or is it better to be done through FSBOās?
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If I pay the customer 100 dollars to hold a property for sale to me for 30-45 days, do I get that cash back if I back out of the deal?
I look forward to everyones response and am very excited to have found reiclub.com! Thank You all!!!
Welcome
I donāt operate in Texas, but canāt see any reason why they would be illegal. Option Purchases are done all the time from large multi-million dollar aquisitions to tiny cottages. You are simply paying for the right to purchase the property at a later date. If thats illegal in Texas, I would be stunned, but have been stunned beforeā¦lol
Tax value is not a valid way to price a property. For example my first property in Long Branch, NJ (a condo) was assessed at around 32K, but appraised at 112K. The values of property should be determined by an appraiser that knows the area and one that is used by several banks. You could also comp houses that have sold NOT listed.
#3) I assume you mean the sale of contract to another investor. My opinion-whatever you can get and agree upon or do it yourself - they want to make money too.
You can do through realtors, Fsboās,etc. Which one is better-who knows-depends on the deal. If you work with realtors (I am not a realtor but work with them all the time/daily). The Realtorās problem w/Lease options is waiting for the option to be taken and then getting paid. This may be a year,2 years,5 years or never if the option isnāt taken. If you can figure out a way to make the realtor happy , guess what-they bring you deals. I donāt Lease Option with Realtors, but will do Lease Purchase-They get paid this way. FSBOās are good too especially if they have considered renting.
There are many ways to get out of contracts. The BS clauses some use i.e. On approval of my dog (exageration) and $100 in my eyes means the guy isnāt serious. There are other ways to tie up a property based on Inspection contingencies, sale of other property, getting financing, etc. You shouldnāt enter a contract looking to get out of it without a good reason. Whats the point-You want to do the deal because it fits with what you want to do. Iām not saying it wonāt work, but is laughable to most sellers and R.E. Professionals. If your just throwing mud at the wall to see what sticks, then trying to find the money, In my opinion,you have just wasted everyoneās time and some contract paper. The stronger your offer, the more serious it will be taken. The answer is yes-you can get it back if you meet the conditions in the contract that says you can get it back. This should not be your intention if you are serious about Real Estate Investing.
Hope it Helps, Again these are just my thoughts, I got one like everyone else!..LOL
KEC