Has anyone first discussed what an owner would sell a property for, and then essentially pretended that you had an Option on the prroperty, and then directed investors or rehabbers to drive by the address to give you a ballpark idea of what thye’d buy it for, before you actually enter into an Option with the owner? to see if it would be marketable to investors or rehabbers?
Bad idea? why? Good idea?
That idea is definitely one of the “least risky” I’ve seen. I would be concerned that one of the investors I sent by would end up talking to the owner and going around me.
just remember that an “option” is just that, an option to purchase. not an obligation. just be sure your option agreement is worded correctly and is for a reasonable time period.
wouldnt this biz make the seller mad because he will think his house will be bought out when the term expires ?
The idea was that only the potential investors would believe you have an option, not the owner. Just to see what other investors might think the property may be worth.
The safest way to do this is to 1) Get comps in the area, this is obvious but do it. 2) Negotiate the best option buy out price you can. The better your option buy out price the more attractive the property is to other investors. If you manage to lock in a great price, just pay for the option and get an ad in the paper. This has worked for me consistantly. example= Home needs work, comps in area are $190,000 owner wants out, wants to sell AS IS, willing to take $140,000. You pay $1000-$3000 for a 60 day option at $140,000 Your ad reads… Elmgrove area!
Handyman special, 3 bed, 1 bath, deck, garage, new roof and Bathroom,needs TLC, AS IS, must close in 30 days, Best offer over $135,000 open Sat & SUN. Place your ad on Sat & Sun. Give your cell number, and If the house is undermarket value your phone is going to ring off the hook. There’s something about houses that need work that attracks people like bee’s to honey. (check out the foreclosure sales in your market if people are paying big money for dumps that need lots of work you should be in great shape) I always talk to the people who come to look at the homes and most of the investors all say that the fixer uppers tend to really get lots of offers. Good Luck
u can also make the contract contingent on financing or my favorite “this offer is contingent upon approval by buyer’s partner.” u always need a way out just in case. so in a sense, u r putting an offer in, not an “option”, but u still have the option to buy it, assign it or back out of it.
petemfa is right by what was stated in that last post. put the property under contract with the contingencies and then u can do ur due dilligence and market it, as long as u give a $ consideration to give u equitable interest. $10 will do it just as easy as $1k or whatever. it’s ur call and how motivated the seller actually is.
Last post is an excellent idea!! Your covered either way and you buy yourself some time.