Option to Purchase - Process in NC

[Greg C.]

Hello Everyone,

I have a bit of a mixed feeling about wholesaling. On one hand I see it as an excellent way to enter REI with little capital and without the need to use a hard money lender to close a deal, but I also can see where some of the brokers on this site are coming from. Wholesaling seems to fall in a legal grey area, and with the number of guru-influenced wholesalers out there at the moment who are swindling people and marketing properties in manner which likely violates state laws I wonder if it is only a matter of time before wholesaling comes crashing down in most states.

I read in a book titled Secrets of buying and selling real estate -- without using your own money by Robert Shemin that one lesser used method for wholesaling besides double closing or assignment of contract is to secure an irrevocable option to purchase a property. For an option fee, a wholesaler/investor (the 'optionee') would then have X number of days to decide whether they want to purchase a property from the owner ('optionor') and if they decide not to execute the contract then the optionor/property owner keeps the option fee. If the contract is executed, then the option fee is often put towards closing or other costs. 

I feel like this is a much more honest way to go about wholesaling, as it gives the optionee (in this case, me) more time to secure funding if I do decide to purchase the property myself or to find another investor if I want to wholesale it. All the while, I am not falsely putting a home under contract with no intent to close on it and I am not inaccurately describing myself as a buyer. If the deal doesn't work out, then I simply lose my option fee.

Has anyone ever conducted a transaction like this before? If so, does anyone have insights about this wholesaling method, particularly in NC. 

Also, in some states it would appear that the option contract itself is assignable, does anyone have any insights on this?