Augie 
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Don’t have a lot of cash to work with? Not sure about a property’s value? Real Estate Options might be just the technique you’re looking for. While there are many creative real estate investing techniques you can employ, options are one to keep in your tool kit! Options give you control with out ownership and can be a powerful money making technique. I love them because they provide me safety, an opportunity to help the seller and a handsome profit.
An option allows us to purchase a set of rights including purchase price, time to close, and terms of the sale. Once you have the option you have two choices; close on the property or simply sell your rights in the option for an immediate profit. That’s right you can sell your option to another party (as long as it isn’t a non-assignable option). Imagine no payments, no holding costs, no maintenance or insurance costs and yet you can still choose to profit even before you close. The key with options is control without ownership.
Happy investing!
Check out my other post about lease purchasing homes.
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Thanks for the heads up on options. Options do have a lot of advantages. Another investment avenue is that of trust deeds, but this depends on which state you are in.
Yes you are right, real estate options are not much preferable in my state as they are no more a technique to generate income or wealth.
Wealth creation and insurance go hand in hand, no one wants to risk losing it all in an accident. So make sure your fully protected. Great read and options for future real estate investors.
Insurance is certainly an important component of an investor team. Asset protection and privacy strategies are equally as important. I encourage investors to find a broker who understands the investment side of real estate as well as how to provide coverage to Land Trusts, LLC’s and Limited Partnerships. Additionally, many carriers offer very limited coverage, so the agent/broker needs to be a guide for the investor so that they have the right kind of coverage.
Great and informative article,i liked reading it!Real estate is not as popular as it was before for investors.People/investors are now looking other and safer ways to generate income!
I learned a lot here. I now know that the options can sell to third party.
Options are an excellent financial tool to have in your investor toolkit! Are you using them in your current investing business?Thanks for your comment!
To your success,
Augie
Options are a great way to creatively buy real estate because it involves little or no risk
Options involve little or no risk when negotiated and executed properly. It is important for investors to know what they are doing with Options because you are correct, Options are an excellent investing technique.
To your success…
Augie
This is a prime example of why it is important to be aware of all of your options, as well as the positive and negatives to each choice. A good Real Estate Investing company will educate you on all of the different options and which choice is best for you, depending on your individual situation.
I’ve never given much thought to how lucrative options can be, but I’m sure they are a great way to save money at the beginning of the transaction and you can exercise your option if the market improves and have instant equity.
Options are an excellent tool for exercising control without ownership. They can be used to lock in prices, terms and virtually anything you can negotiate. They can be used to enjoy upside growth or prevent downside risk. The best thing is that you can buy, sell or even trade them…
To your success…
Augie Byllott
Great post. I really enjoyed it. Nice job.
This is a win-win scenario. Whether it is up foreclosure, you would still get profit. Just learn how to play with it, when to buy and sell. Nice discussion here. Learned a lot.
Nifty trivia! Thanks so much for the heads up. This option idea, albeit new to me, sounds extremely sensible and promising.
It is a step up from the rent to own technique because it affords greater flexibility, attracts more qualified buyers and I find it has a higher closing ratio.
Happy investing…
Augie
I like how these do not require a huge amount of initial investment and so people with a bit of time but not so much capital can make an investment and, hopefully, profit!
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Great insights on options. Your video is concise and the ideas are presented in very simple terms. Thanks so much!
Great tips regarding option buying for real estate, clearly indicating the positive aspects of real estate investments. happy to follow.
Great tips regarding option buying for real estate, clearly indicating the positive aspects of real estate investmenting. happy to follow.
Thanks, glad to have you on board.
I think for many people the key is to learning, establishing their objectives for the investment and then taking action. Many people confuse building wealth with real estate as the vehicle with a get rich quick scheme.
thanks for your comment!
With the U.S housing market in crisis, these are all great tips. Thank you for sharing.
Well that’s a different angle that real estate investors can take! Thanks for the video, Augie. You’ve been a great help.
Hi Augie! I’m a newbie in real estate, considering I barely have a year’s experience in it. I’ve heard about real estate options before, but never in the simple, honest way you shed light into it in your article.
Keep writing!
Boy there are deinitely a lot of folks that made a ton of cash during the boom doing this type of thing here in the Clearwater real estate market. I never indulged myself. A lot of people have been trying to end around the banks with options on short sellers but the state and the banks have really cracked down on this especially when it comes to folks holding a Florida real estate license.
Options aren’t limited to dealing with properties in foreclosure and you are right, there was a time when they were used in some cases to assist homeowners in default. Florida Statute 501.1377 defines the requirements under which anyone dealing with homeowners in foreclosure must act and how the homeowner is to be treated. It spells out who can do what down to the mandatory verbiage, timeframes and font size. It is very broad in terms of how it may be interpreted by the courts and at present there isn’t a lot of case law. Penalties can be significant so beware to those dealing with the Florida foreclosure market.
As a person licensed by the State you will always be held to a higher standard because you are a professional. Thanks for your comment!
To your success…
Augie
“Options aren’t limited to dealing with properties in foreclosure”
This is true. However, I am curious as to how big the market is right now for real estate given the current economic situation?
Real estate is a local business and it will be different in different states, counties, cities even neighborhoods. People still need a place to live, raise their families and those who can help make this a reality will benefit.
Options offer a way for those wanting to sell and those wanting to buy to find a way to work together without the buyer shouldering all the risk.
There is a lot of bs and useless info on the net and its refreshing to see something that is honestly helpful. thanks for the video.
P.S. The waves in the background were a little bit loud..
For once, there is honest real estate advice available on the net. Although I think you have failed to highlight the major risks involved in going into the real estate business, you have managed to cover the vast opportunities the business can offer. I couldn’t hear you properly in the video though. Thanks for sharing nonetheless,
Abbs
Great tips, but with the current real estate market is this still a viable option? Should we wait until the market bottoms out (which I don’t believe it has) before looking more carefully at this?
- C
The purpose of using options is to mitigate risk and that’s why now is the perfect time to employ them. You might want to check out this home study program to help you learn to leverage options as well as leases thereby getting the benefits of control without ownership.
Wishing you success…
Augie
Hi there, Augie! That was such an informative post. I really appreciate your choice of words and how you were able to relate information in a very understandable way. Keep posting, Augie!
I didn’t know that real estate option can also be used as an investment vehicle. I guess I am always looking at it from only a consumer point of view, and not investor. The only thing is that option comes with a timeline and if you do not sell it off at the deadline, you either have to coffed up the rest of the money and buy over the real estate or you forgo the option => loss. Am I correct to say that? And with the current climate over here in US, I think this is a rather risky way for investing.
When we buy options we always seek two goals designed to minimize downside risk:
1. NEgotiate at least one extension period into the option agreement
2. Use as little consideration as possible therefore is we have to walk away the loss isn’t too painful
It is work noting that if you earn $20,000 on an option and never invest more than $1,000 as option consideration, you could still have a very profitable business even if you walked away fro 9 out of 10.
To your success…
Augie
Was wondering if your opinions were still the exact same now that this post is about a year and a half old? Wondering if you would tweak it in anyway?
Hi Gary:
Options are a great strategy for virtually any market because they provide control without ownership. They are an asset that can be sold or an opportunity to lock in certain rights and privileges for a set amount of time giving the holder the flexibility to limit their downside risk while maximizing their potential for creating a profit.
Thanks for your question!
To your success…
Augie
Its a tough business and anything different is a useful addition to the toolbox.
The more tools in your toolbox, the easier it becomes.
Happy investing
Augie