Much is written and said about making money with options by Stock Brokers, Commodity, Gurus, etc. They don’t know a thing about a much more profitable, SAFER, way to invest in options. That way is buying and selling Real Estate Options. Almost anyone, with a little coaching or training, can invest in Real Estate Options with VERY little money and reap big dividends with minimum risks. I doubt that you could buy a stock or commodity option for $10.00; however, I have bought Options to buy Real Estate for as little as that. I have known other people who got it down to $1.00. Unbelievable, right? But it’s true.
Now, where in the world would we find properties that we could buy an Option to buy with a small amount of money? Right in the local newspaper and in your area Realtor’s Multiple Listing Service (MLS). This is especially true with today’s lousy (in most areas) housing resale market.
Maybe first, so that we all know what we are talking about, we should explain a few terms, names, etc. about Options. You can’t tell the players without a scorecard.
What is an Option? An Option is a contract between two (or more) parties concerned with one party (the Optionee) buying an Option to purchase, Lease, or whatever, Real Estate from another party, (the Optionor).
Let’s further identify these two parties:
1. The Optionor: This is the party who owns or controls the Real Estate in question.
2. The Optionee: This is the party who wants to buy the Option to buy the property from the Optionor.
The Option, as stated, is a contract which should be in writing. It must contain language showing that the Optionee paid some consideration for the Option. The Option should be for some specific period of time; a month, a year, 5 years, etc. The Option must also include the purchase price of the Real Estate if the Optionor does exercise the Option.
Now, once the Option Agreement is signed by both parties, the Optionee has control over the subject Real Estate for the entire time period of the Option. To protect the Optionee I would recommend that the Option be recorded at the County Courthouse. This protects the Optionee in that if any title search is done it will show that the Option exists.
There are many variations and Objectives that can be included in an Option Agreement. In essence, maybe to better understand an Option Agreement, just look at a standard Sale And Purchase Agreement wherein the buyer has deposited earnest money (somewhat like an option) to buy the property from the Seller. If the Buyer defaults on the agreement he loses his earnest money.
In the next post (coming soon) we will go into some case histories to better explain and to show you how you can make BIG $$ using Options.
These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.
Now, where in the world would we find properties that we could buy an Option to buy with a small amount of money? Right in the local newspaper and in your area Realtor’s Multiple Listing Service (MLS). This is especially true with today’s lousy (in most areas) housing resale market.
Maybe first, so that we all know what we are talking about, we should explain a few terms, names, etc. about Options. You can’t tell the players without a scorecard.
What is an Option? An Option is a contract between two (or more) parties concerned with one party (the Optionee) buying an Option to purchase, Lease, or whatever, Real Estate from another party, (the Optionor).
Let’s further identify these two parties:
1. The Optionor: This is the party who owns or controls the Real Estate in question.
2. The Optionee: This is the party who wants to buy the Option to buy the property from the Optionor.
The Option, as stated, is a contract which should be in writing. It must contain language showing that the Optionee paid some consideration for the Option. The Option should be for some specific period of time; a month, a year, 5 years, etc. The Option must also include the purchase price of the Real Estate if the Optionor does exercise the Option.
Now, once the Option Agreement is signed by both parties, the Optionee has control over the subject Real Estate for the entire time period of the Option. To protect the Optionee I would recommend that the Option be recorded at the County Courthouse. This protects the Optionee in that if any title search is done it will show that the Option exists.
There are many variations and Objectives that can be included in an Option Agreement. In essence, maybe to better understand an Option Agreement, just look at a standard Sale And Purchase Agreement wherein the buyer has deposited earnest money (somewhat like an option) to buy the property from the Seller. If the Buyer defaults on the agreement he loses his earnest money.
In the next post (coming soon) we will go into some case histories to better explain and to show you how you can make BIG $$ using Options.
These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.
Good advice, indeed is good to study the best possibilities of investment.
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