Id like to hear some success stories with those people who make options work for thier business.
Could you be a bit more specific? Do you mean Pure Options? Lease options?
Sure, I think I was thinking more Pure Options, on real estate.
I lent money to some foreign guys, developing commercial property in a Las Vegas a year ago. They, instead of buying the property and then persuing some speculation on it, would option the property from the current owners, and essentially sell the seller on “partnering with them”.
I thought it was creative in that they did not have to raise the significant funds to buy and hold the property (thereby creating heavy overhead), and if the redevelopment couldnt get approval (which it did not), their risk was limited to the option fee.
Im wondering if other people out there use this sort of option for their real estate businesses, and what sort of success they see from it.
Pure Options are nothing new, and used frequently. They are easy to understand for the homeowner. And presented correctly, the homeowner sees this type of deal as a no-lose situation. And for us, the investor, the risk is limited to whatever option money we agree to put down. . .which should be minimal.
AJ290
I,m confused between CA’s and Pure Options. They are fairly new terms to me, but I’ve been trying to read everything that I can to catch up on the terms. I’ve been primarily investing in foreclosures at auction, but now is the time to be creative and put some new ideas in motion. Any explaination of the two terms and how they are applied to REI would be greatly appreciated.
Diqueze, Pure Options are easy. It is simple an agreement between the parties whereby the homeowner gives you the right, but not the obligation, to purchase the property for an agreed to amount within an agreed to time frame. If you don’t exercise your option to purchase it simply expires and that’s the end of it.
When you ask about CA’s, I am assuming you are talking about Cooperative Assignments? That’s a type of lease option where instead of you being in the middle of the deal as in a sandwich lease, you cooperate with the homeowner in putting the deal together. You can get a boatload of info about CA’s over at The Naked Investor.