@Robert Duncan Beginning Rules to Understand
1. The newbie gets real estate analysis paralysis because he is afraid to lose money or make a wrong move, so he keeps on looking for a formula that will help to prevent both.
2. To prevent losing money or making a wrong move, consider taking control of the property using a real estate option.
This little known legal device allows the potential buyer (you) to control the property while having no responsibilities for the property. The seller wants to sell. You merely need to convince the seller that you are capable of performing, i.e. buying the property and/or finding a buyer for the property, which is what I do. A big advantage to an option is that it conveys an inchoate ownership position, i.e. a future ownership. Therefore, you will be able to list the property in the MLS. Check, but you should be able to maintain that you are an owner in areas where anti-wholesaling laws are prevalent.
3. The time frame to choose to buy the property can be long; I've never optioned for less than 6 months, usually one year.
4. The properly drawn up option document will have a very low earnest money down payment. I have only ever paid $1. People think a big earnest deposit will guarantee action. If the seller is convinced that you will take action, then the need for a big deposit goes away.
5. If the property is owner occupied then make sure the seller will cooperate in the sale, i.e. putting out signage, answering questions, not being in the property when there is a showing, etc.
6. If you think of anything that can mess up a transaction, then create a clause to protect yourself.
Using my option, the most I can lose is $1 - that makes it safe.
If you concentrate on finding distressed sellers, then you will have the best chance of having an agreement that suits you because the seller has few choices.
I have had as many as 225 options in place at one time, never paying more than $1 for option consideration.
Good luck. Reach out for any questions.
CoachMitch.com
