From what I’ve been reading if you find a good deal and motivated seller agrees you get the property under contract (option to purchase agreement/with and/or assignee after buyers name) and then you find your buyer and do an assignment contract with them. Where do you find these contracts? Also if you sign the option to purchase contract and cannot find a buyer–how do you ensure that you are not obligated to purchase said property?
Pretty much every real estate form can be found on the internet by simply googling what you’re looking for.
If you can’t close a deal your only risk is your deposit. You cannot be forced to buy.
Thank NSU1997
Freedom, if you’re really serious about this business you’ll need to take a more realistic and professional approach. Pulling some generic contracts off the internet is in itself an invitation to trouble. Even more so is not knowing the basics of the strategy you are using.
Do a little due diligence before forging ahead. Right now you might know just enough info to be dangerous to yourself.
AJ — thanks for your response. I definitely do not want to get into any trouble with REI. I have been researching wholesale deals and was posting to see if I was comprehending, if even slightly what I have been reading about it. The only RE investing I have done is purchasing an REO home to rehab/live in at 35% of what the bank was asking. The realtor set everything up with the bank and closing. I’m just checking out the wholesale thing because theres so much REI talk about it. So far wholesale doesn’t sound that easy to me; unlike just saving and buying a REO from the bank.
Trying to “home depot” this thing is a way to set yourself up for failure.
Why not just invest in a course on Lease Optioning? You can get Ron LeGrand’s in Ebay by Google-ing: “ron legrand lease option ebay”.
Or look for Tod Toback’s “Lease Purchase Wealth System.” I have both systems in my library, plus Barney Zick’s option courses, and I put them through the ringers and they all came up with flying colors.
If it’s a money issue at this level, then we’re not really ready anyway. It takes some (just a little) money to make money, and I’m a real estate course junkie, who knows better than to believe we can make money with ZERO money whatsoever. There’s no free lunch.
Get some training and a blue print, or get a 9-5 job first, and then get some training. After you’ve got some horses to work with (training and some cash) you can go forward with confidence and come out swinging.
Freedom, by the way I wasn’t trying to be snide with my comments above. They were said with good intentions. :cool
javipa is correct. Before forging blindly ahead, slow down a bit and do at least a bit of studying.
He mentioned a few courses on lease options that are worth looking into. He didn’t mention my favorite and, in my opinion, the best one out there: Carbonare’s, The Naked Investor. For less than $100 it can’t be beat. Plus, his board is a wealth of info on the subject: www.naked-investor.com
Wholesaling is easy when you know what you are doing. If you haven’t purchased a wholesaling course or found a mentor, you will screw up royally. There are many sub details to the main themed steps to wholesaling, such as marketing and negotiating, to repair estimates etc. If people think hey can learn wholesaling just by posting on a forum, they have another thing coming.
An Option contract is just what it implies, an “option” to buy not an obligation to buy. With an option, you don’t have to use any weasel clauses, because it isn’t a purchase agreement. In other words, an option is unilateral only binding on the seller not you. The problem with options contracts is that most sellers don’t want to sign them. They rather sign a purchase agreement instead. I try to tell the seller that I have an interest in their property, but I’m not sure their price will be ok with my “money partners”. I need to have my lenders run the numbers, but they want something in writing showing them that I have an equitable interest in the property. Sometimes they’ll go for it but most of the time won’t. Options normally work best on large scale commercial property deals then residential but it doesn’t hurt to try.
Yes, be careful with the contracts you get from the internet especially if you have limited knowledge. I recommend that, at a minimum and regardless of what forms you use, that you also get a subscription to a legal service like pre-paid legal so that you can call them and ask them about the paperwork you intend to use.
Freedom, I agree with AJ, jav and James but let me tell you how I do it. I enter an option to purchasee with the seller for one whole dollar. I advertise and find a buyer acceptable to the seller. Let the seller and end buyer get a contract together. Then instead of assigning I release my contract at closing for my fee. You might also google Adam King or cooperativepurchase.co his course is only $50 and the best money I ever spent. Herbster
Interesting approach. Thanks for sharing that.
This is for Herbster.
Who gets the option money from the buyer? Do you help the seller with the lease and option agreements?