I need a "Straight Option" Course.. - Posted by Bev

Posted by Houserookie on July 06, 2002 at 18:53:13:

A memorandum of agreemnt is not the same as a performance mortgage. Performance mortgage gurantees that you will get paid at the closing table.

Memorandums are enforceable in court, and can cause difficulty getting title insurance. But in some states, and some title companies, recorded memorandums offer little in terms of protection.

If it works for you, hey keep on doing it. I sure would not be paying someone an assignment fee to buy from someone else.

Austin

I need a “Straight Option” Course… - Posted by Bev

Posted by Bev on July 05, 2002 at 09:08:06:

Good Morning and HAPPY 4TH TO ALL,

I am looking for the best “and” affordable “Straight Option” course that I can get my hands on, I prefer e-book and most importantly a course that really focuses on this subject only and not several other subjects like L/O, S2, etc… Any advice and feedbacks are welcome.

Thank You

Re: I need a “Straight Option” Course… - Posted by Dave T

Posted by Dave T on July 06, 2002 at 10:55:16:

Why?

The purpose of an option is to gain control of a property for a finite period of time with a small investment (option premium). If you fail to exercise your option, you only lose your option premium.

You accomplish the same thing using a standard purchase agreement with a small earnest money deposit and an extended settlement date. Your purchase agreement would contain language that limits the seller’s liquidated damages to your earnest money deposit in the event you default.

In both instances:

  1. You can purchase the property yourself.
  2. You can assign your contract or option to another buyer.
  3. You can walk away from the deal entirely and limit your loss to the earnest money or option premium you have invested.

Seller’s are already familiar with a traditional sale agreement, but may need to be convinced to enter into an option agreement.

What additional flexibility would you gain from an option that you can not find in a purchase agreement?

Re: I need a “Straight Option” Course… - Posted by richard

Posted by richard on July 05, 2002 at 15:46:57:

Bev: Try “Thomas Lucier” at amazon.com . He has what is described as an in depth report on straight options. He has a website at Floridalandlord.com/

Re: I need a “Straight Option” Course… - Posted by Matt KY

Posted by Matt KY on July 05, 2002 at 11:26:52:

Id like to get one too. The Ron Legrand Lease Option course covers options, but barely. it doesnt even tell you when you get paid. that course is great but it needs LOTS more detail.

Another reason… - Posted by Houserookie

Posted by Houserookie on July 06, 2002 at 11:35:53:

Your statement:

“You can assign your contract or option to another buyer.”

…this is not the most profitable way because you’re asking buyers to pay an assignment fee. eople have a difficult enough time getting down payment let alone pay “another” fee.

By using options, cancellation fee, in conjunction with performance mortgage, you can have the seller pay you out of sales proceed.

Austin

Re: I need a “Straight Option” Course… - Posted by Houserookie

Posted by Houserookie on July 06, 2002 at 11:28:29:

Well not exactly…

You can record a performance mortgage to secure your interest with an
option. I doubt you can do that with a purchase agreement.

You can also avoid the seasoning issue with option
cancellation fee and then allowing the buyer to buy directly from the
seller. You also avoid having to do simultaneous closing.

Re: Another reason… - Posted by Dave T

Posted by Dave T on July 06, 2002 at 12:20:27:

You say that assignment is not the most profitable way because you will have difficulty finding a buyer with up front cash.

Do we have apples and oranges here? What does the method of payment or timing of payment have to do with the fee itself? My assignment fee is the same whether I have an option or a purchase contract. My profit in the assignment is the same either way.

If the buyer for your contract assignment does not have the nominal assignment fee on hand, my assignment fee can be in the form of a note secured by other property the buyer may own. Oh, and by the way, if I agree to defer my payday and accept installment payments, my fee goes higher and I charge interest. This would be even better for me.

Re: I need a “Straight Option” Course… - Posted by Dave T

Posted by Dave T on July 06, 2002 at 12:05:00:

You can record a memorandum of agreement with a purchase contract.

There is no seasoning issue when you assign your contract, allowing the assignee to buy directly from the seller? No simultaneous closing here either.

Re: Another reason… - Posted by Houserookie

Posted by Houserookie on July 06, 2002 at 18:58:47:

>>"What does the method of payment or timing of payment have to do with the fee itself?>>

Some people prefer to walk out of closing with cash, not just a note secured by some other property.

>>>>"Do we have apples and oranges here?>>>

I don’t know you tell me. I dont take notes unless they’re secured by real estate and my payday is the closing day.

Austin