I am looking to option a piece of land for around $700,000 and would like know how to put this together. What type of monies would i have to put down and how long a term would you think i would be able to get. Also, what would i nnormally have to pay to extend this option. I think i may have a buyer for this parcel.
The answer is you want to lay out as little as possible. I usually approach it like this. Find out what the owners situation is. Has he had the parcel long? If so, getting a 90 day option on it shouldn’t be that hard. Tell him the money your GIVING him is just that. FREE MONEY, not a loan, not a deposit, it’s his! Go cash the check! Then get your buyer down there. If you write the option for $3000 for 90 days at a $700,000 purchase price the owner has NOTHING to lose but the 90 days. I think you’ll like doing this it sells itself. Just make sure your right on the price you can get for the parcel.
get an option to buy, find a buyer who will buy for a higher price than what the option is set at, have a double closing w/ title company, walk away with the difference