Re: First deal? Help! - Posted by Tim Fierro (Tacoma, WA)
Posted by Tim Fierro (Tacoma, WA) on July 10, 2002 at 16:25:37:
Continued From E-Mail
That’s correct. They don’t mind leasing but they want to accept the first contract that they recieve. I was thinking of asking them for 2 to 4 weeks to find a tenant buyer and then reassuring them that we could close during the next year. What would my exit strategy be if I did a straight option. Would I just find a buyer who would pay more and then the owner finance?
Purchase, Lease/Option, and Owner Fianancing are 3 different ways to buy.
If you purchase now, then you can sell how you want. But it doesn’t look like you are in a position to go that route.
Owner finance is another way, if the sellers are willing to do this. They can’t accept owner finance and also keep an option available to sell to another who comes along. Well they can, but that takes us off into another tangent.
Since they seem (you haven’t given us information on the willingness, eagerness, and motivation of the seller) to want their money now, an option seems to be the approach if the numbers work out.
If they have it for sale for $100k, and you think you can sell it for $150k; you could write an option to purchase the property within the next xx days for that $100k. If you decide not to purchase, no harm. In the option you could write a contingency to allow the sellers a way to either have you put up or shut up should they get another offer that comes in that gives them their cash they seek. In the meantime they are still marketing through whatever means they want and you are marketing trying to find a CASH buyer.
If the sellers do not want to sell on owner finance terms, and they don’t want a lease/option with purchase later; then an option to purchase with some future date will get you in as a principal and then you need to close the transaction. You can not market as a L/O or owner terms since you don’t have that capability with the option given to the seller. They want their money so you need someone who has the money to give it to them.
Correct me if I am wrong that the sellers will do a Lease/Option and/or a Owner Financed term situation. Without something like this where the seller is willing and flexible, you have to find a cash buyer with money or a lender ready to go forward.