Posted by Randy (SD) on February 09, 2004 at 15:37:57:
In my mind an “option” in and of itself is no different than the purchase agreement. What are you saying in an option agreement, that you have the option to buy a property for a set price by a set date. A lease option simply allows the buyer to lease the property until such time they can exercise their “option” to purchase the property. Regarding your relevant questions will accelerate except a very small option consideration? Some will - some won’t. Finding a buyer for your option contract, no different than assigning a sales contract. As for assigning the option contract it could entail the existing lease if still valid or just the option.
Using Options only ( not lease options ) - Posted by Neil (IL)
Posted by Neil (IL) on February 09, 2004 at 15:25:07:
There has been a lot of talk on these boards about people getting started by using lease options and flipping properties.
My question is: Why don’t people just buy options on homes, and then assign them for a profit to other buyers/investors?
It seems like a relatively risk-free way to control property, and still not have to worry about tenants.
Here are some relevant questions:
(1) Are sellers willing to accept a very SMALL option consideration (like…$1-$10?)
(2) Is it harder to find a buyer since you would only be assigning the option to them? (looks sketchy)…or
(3) Do most people who do options only just assign the option to another investor? (somewhat wholesaler style).
P.S. Anyone in IL near chicago feel free to email me - I’d love to meet up and share ideas with anyone in the area.
Re: Done all the time - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on February 09, 2004 at 16:06:21:
by some, but not talked about too much.
It is all a negotation issue concerning what a seller will do. Mostly there is an objection to selling an option to a stranger for a small fee. This is true no matter what is being done, for dozens of reasons.
One benefit to using an option is that if you find out that you have made a mistake in this transaction you can just let the option expire, and you will be out of the deal. An option more closely resembles a listing, than a purchase agreement, and some states will look at an option as a listing. No license needed to buy and sell an option. As a matter of fact an option is not real estate at all, it is personal property. It is a contract.
One thing that I like real well about an option is that it can be used from inside a self directed IRA, very successfully.