Option advice

I use options often in this type of market. You can tie up a property for as little as $500 (or less, I use $500 because it gets people interested)and then bring in your buyers. This has been discussed here often. You can search options and get the nitty gritty.

One of the things I’ve run into is “the first time home buyer” who wants the house I have optioned. I’ll have my lawyer take a deposit on the home and have the buyer and myself sign the option assignment. Very basic stuff.

Recently I had to deal with a situation, a bank that was lending my buyer his money did not want ANYTHING on the HUD 1 form about the option. I’m usually on the HUD 1 and my money is paid to me at the closing.

This is where a good lawyer is worth every cent. My attorney went to City hall where the home was located and recorded the option and attached it to the title. This way when the closing attorney does the title work my option shows up. This protects my rights under the option agreement. Basically, it insures I get paid, and satisfies the bank issue with the HUD1.

I’m sure most of you guys know all about this, but I figured I’d thow it out there for anyone getting started.

In a falling market options can give you HUGE leverage with a pre-defined potential loss and unlimited upside profit.

Home in example was optioned for $500 for 60 days, at $100,000, sold within 10 days to first time buyer for $119,000. Closing is tommorow. $500 option plus $900 in attorney fees =$17,600 profit and I never owned the home.

In this type of market options can give you a great way to make money without having to actually buy these homes. If I had done this as an outright buy, I would have had holding, closing and monthly payments to deal with if a buyer had not been found so quickly. this way worst case I’m out $500 if I can’t find a buyer. Even the lawyer fee’s don’t come into play until you have a real purchase.

Another tool in the toolbox, that’s all it is.

Good info, been thinking about this a lot myself. I hate the idea of lease options, they seem so good on paper but so hard to execute properly. A straight option eliminates all of that risk and makes the process shorter and easier. Definitely a worthwhile thing to checkout.


I have never done a lease option and have no intention of trying.

Straight options are a beautiful tool. The first time you do one you’ll stumble through it, make sure you use an attorney. A few years ago I had a scum bag rehabber who thought he would cut me out of the deal and go directly to the owner. This guy was a real piece of s**t. The owner was not living in the house, he was staying with a girl friend, even his mail was still going to the unoccupied home. Well this jerk has a brother who is a detective, he has him do a BCIC check and locates the owner. He was trying to cut me out when HIS lawyer found the option recorded during the title search. His lawyer told him straight out. Without this guy’s (my) signature on that option assignment I can’t get you clear title to the property. I made my money.

I’m relatively new to real estate investing. Are there any other ways, aside from options, to record your interest in a property so as to guarantee you get paid?

I feel the same way about lease-options as you guys. There are too many “what ifs”. I’d rather get an straight option for a set amount of time.

Thanks for the info.


very good to know. thanks a bunch.