Hi all,
I am looking for information on what optioning houses is all about. I’m new to REI so if there is someone that would want to explain the basic that would be sweet thanks. If you have MSN or AIM and would want to discuss it on messenger let me know and I’d love to. Thanks
Not sure if I understand what you are asking. A contract to purchase is an agreement to purchase a property. An option is the right but not the agreement to purchase a property.
I think I should’ve phrased it optioning houses?
“It’s as simple as getting a property under contract for price X, and selling that contract or property to another person at X + your profit. It’s called optioning houses.”
This was a statement someone made.
Ok, that makes sense. I’ve also heard that called “assigning” a contract. As you mention, you get a property under contract and you sell your contract before you have to close.
There are two strategies being discussed here. First options, this word is a noun not a verb so ignore the term “optioning”. An option is a financial instrument giving you the right but not the obligation to purchase the underlying asset within a specified time frame at a specified price. For instance you might acquire an option, usually at some cost, to purchase a house. You can exercise that option or let it expire unused. The second theme is the act of assigning a purchase contract. You might make an offer to purchase a home at a specified price and your contract language allows you to assign that contract. This allows you to go out and find a buyer willing to pay more than your purchase offer for the house and you assign your contract to that buyer and earn the spread. If you don’t find a buyer then you are obligated to close on the purchase as originally agreed.
I replied in another post of your’s that options and lease options are the best way for most investors to begin in real estate, at least in my opinion.
Check out my sig for a website I recommend on the subject matter. Good luck.