All Forum Posts by: Brian Gibbons

I would agree TOTALLY to this, but add...

If acquiring - controlling,

Sub2 - best, then, it depends....
Lease Option Assignment
ROFR (Right of First Refusal) and a lease
Contract for Option plus lease
Contract for Deed
Wrap Around Mortgage - All Inclusive Trust Deed
Land Trust - Assigning Beneficial Interest

All the above have strengths and weaknesses.

Then LASTLY Sandwich Lease Option
You need to be a sharp REI with amazing systems in place to do a volume of these. And be in a rising FORECAST ABLE real estate residential market.

Lindsay Wilcox getting the local books in Indiana to study for a real estate license would be a good start, whether you get a license or not. They are a good reference to keep on your book shelf.

Building a team of professionals that can be trusted is another step. Go to your local REIA and network. Get a referral for a CPA and Title Co. and Attorney.

I would have a plan, say flip 5 deals, then buy and hold. This is only a suggestion.

You need good credit and cash to buy and hold traditionally. Learn about Private Lending. Get this book http://www.amazon.com/gp/offer-listing/0757000940/ref=dp_olp_used?ie=UTF8&condition=used

Hope this helps you get started.

K. Marie Poe the agreement is for sellers that usually do not have a marketing plan (fsbos).

This merely states that I have an Option to buy the property for a negotiated price, but that I don't take the property off the market.

The Seller can continue to market the property or even list it with a real estate agent, but I still have a right to buy the property at a certain price. The listing agreement says this.

Since I didn't tie up the property, giving the Seller $10 is fine for the Open or Non Exclusive Option.

You can put an Option on just about anything, but the best thing to wholesale is a property needing major repairs.

Since it isn't costing you any money, you should Option everything you can get your hands on.

Some will sell and some won't, but you have absolutely nothing at risk but $10.00.

An assignable option to purchase that is non-exclusive. Here is a clause....

Non-exclusive: If the Optionor, or Optionor's Realtor, produces a bona fide written offer during the term of this agreement and prior to Optionee securing a buyer, or purchasing, this agreement will be considered null and void at Optionor's written request and payment of release fee of $1,000. Such written request must be delivered to Optionee with a copy of the bona fide offer and release fee within three days of acceptance or this agreement will remain a valid and binding agreement.

Nice post K Marie... :)

Hi Karen,

Perhaps you could look at this article and give me your opinion of a Lease w Option VS Lease and Contract for Option,
http://www.biggerpockets.com/blogs/3/blog_posts/26565-a-contract-for-option-is-better-than-a-lease-option

A Contract for Option was devised to not give an option until a contract was satisfied, like a contract for deed.

Here is the contract
http://www.biggerpockets.com/files/user/REISkills/file/contract-for-option-to-purchase

With a one year lease and possible extensions, it is a tool that I believe that that will assist a NC landlord/investor.

Bill Gulley great post.

I call this a Delayed Sale and Purchase, with a delayed closing.

You could:
1. sign a lease
2. sign a Sale and Purchase with a 14 month close
3. get pre approval from mortg broker
4. have a 3% deposit in escrow that is non refundable if not closing in 15 months FOR ANY REASON.
5. have a property inspection now and remove all contingencies re: property's fitness
6. have a condition to deposit $10K in a savings account
7. If the buyer dies, gets incapacitated, changes his mind for any reason, the 3% is forfeited.

Good luck Robert Burns

Brian

If you have a lease with an option, why dont you assign it for a fee and have the new tenant buyer open up a CD with $10K a month, then exercise the option when it hits the amount needed?

Or open an escrow with a lease and a purchase & sale agreement with escrow instructions to execute the sale.

And if the seller agrees to accept the $10K a month it is an installment sale. There are IRS tax issues.

Things can go wrong. Buyers can sometimes promise one thing and do another.

Be careful.

Bill Gulley may want to say something here.

@Jose Flores, great to hear you have a deal in the works, but a lease option with repairs buying it is dangerous.

I would work on getting IRA private lenders that can fund your deals at 80% ARV, or money partners for JV 50 50 splits.

With FHA financing at 3.5% down, who would put $10K down on a $55000 house?

So get a private lender to fund you .8 x 55,000 = 44,000, now you own it. Get 3 months moratorium (no payments) to fix it up.

I always tell people that sell fixers I dont have the cash to pay them and fix it up too.

Is it free and clear? What is the existing financing?

If it is free and clear give them a note for their equity. Try no interest and no payments for 6 months.

If there is existing financing, try a sub2 for fixers. No payments for 3 months.

Remember this will sit a LONG time unless some "angel" rehabber comes along.

I look for a minimum profit of $20000 min for my time at a cheap low comp resale value. Now you have "wiggle room"

So I'd ask myself this question:

How can I make $20K min with this deal?

If not look for a different deal.

There is always the SAFE Act with selling on terms.

In LA you have Bond for Deed. Here is a reso urce:
http://ackelandassociates.com/bond-for-deed/

I use a lease and a Contract for Option to Purchase, so the buyer gets the Option at the end of a lease.

See http://www.biggerpockets.com/blogs/3/blog_posts/26565-a-contract-for-option-is-better-than-a-lease-option

Hope these ideas help.

Brian

Get a Lease, then get an option from the seller.
Have the seller sign and notarize.

Then have the buyer pay you an option release fee.
Create a new option and a new lease, and have the new buyer sign the lease and option, then have the seller sign.

Then get out of it.

Use all the forms necc to sell, as in lead paint, etc.

I hope that helps.

Brian