TLDR: I have been researching the use of options, and there is good data, but it is scattered all over the place. This thread is a place to consolidate useful data.

So, the other day after a meeting at work, my boss started talking about how he has a prime 3 acre lot on a mountain that he is wanting to sell. He said he bought it before he had kids, and he doesn't want it anymore, and he just wants to get rid of it (even said he would even take half of what he paid for it because he hasn't even visited it in 5 years).

I emailed him after the meeting, and told him that I am interesting in doing a deal on his property. I have never dealt with Real Estate before, but I recognized a potentially great opportunity and I jumped on it. After that, I PM'ed Zen (You are the man Zen!) and asked a couple of questions and he pointed me in the right direction: optioning the property (not a lease-option, just a regular option).

I've been doing a lot of research the past few days, and am still slightly confused, so I thought I could post up good resources that I have found and experienced members here could give some insight.

The questions I still personally have that I am researching are as follows:
-So once I have an option for the lot with my co-worker, and once I find a person who wants to buy it, how exactly do I do the paperwork and what paperwork do I use? So far, it seems that there are two ways to go about it; 1) sell the option to the buyer and 2) exercise the option and get into contract with the seller, and then assign the contract to the buyer. Option 1 seems more simple, does anyone have any recommendations? What paperwork do I do, and what paperwork does at attorney do?


Feel free to post good resources and I will add them to this post!

Resources:

Option Contract form with videos: Real Estate Option Contract | Real Estate Investing Tips

Contract Assignment form with videos: Carving Up the Real Estate Assigment Contract | Real Estate Investing Tips

Finding A Contract Attorney (thanks Russ): https://www.thefastlaneforum.com/as...need-tips-getting-attorney-talk.html#post5925

How to Use Assignment of Contract and Option video: https://www.youtube.com/watch?v=24yn0-7LYd4

If the area could possibly be zoned for commercial use:

What I would do is go to the guy, tell him you are a Land developer. You say here I am, it's your lucky day, I here to save you. I will pay you what you want plus 10%. At this point his eyeballs will be rolling over the table and he will be scattering to pick them up.

Then you say but since I am looking to develop 500 acres, I need to time to assemble and do my due diligence; put the closing date 10 years from now. Basically that you can buy at the set price at anytime within the next 10 years. The agreement states they cannot go behind you and sell the property.

Now you've Locked the place up in the option to buy at any point, haven't paid a dime.

Go and find a seller willing to pay more, maybe a land developer. Or you wait until it is rezoned, your property value goes up atleast 10x, you excerise the buy, and you sell for 10x.

laugh all the way to the BANK.

Scenario TWO:


If land is not good for rezoning for commercial:

lock it up for 50c on the Dollar of the Market Value, instead of paying higher. Same option, same terms. He Can't sell, close in 10 years, blah blah. Your money made here depends on how low you can buy at, not like rezoning scenario where your guaranteed cash.


As for paperwork, Don't try to be a damn lawyer. Your not. Stop it. Tell the lawyer exactly what you want, and he will draft it up for you.
If you do the paperwork yourself, you will get SLAUGHTERED. I PROMISE.

Talk to 10 Real estate lawyers who have 10+ years experience, and any one can help you. If they do not know what they are doing, tell them to quit their job, and find a new one.

Lot of money to be made here with no investment. Good luck to you.

Your making this way to complicated for a little bit of land. Options are great, but I'd use them if I were buying a multi million dollar site.

How much is the dirt worth? Really? Can you get it for 50% or less of FMV? If you can write up a purchase contract that you can assign, get it under contract and go assign it for a fee.

The most important aspect to determine which you have not addressed in your post is that if this is a deal? Will he take less than todays FMV? Until that is determined you have nothing.

Silverhawk851 said:

Then you say but since I am looking to develop 500 acres, I need to time to assemble and do my due diligence; put the closing date 10 years from now. Basically that you can buy at the set price at anytime within the next 10 years. The agreement states they cannot go behind you and sell the property.

Click to expand...

Coming from someone who has put together neighboring parcels that is horrible advice. Really why would you tip your hand and screw yourself like that? Plus no one is going to agree to a closing date 10 years in the future, really?

I go threw great pains to distance myself from parcels if they are next to each other, and worth a ton more together than separate.

Once someone knows you need the land, the price goes up. Once one person knows everyone does.

I assembled a nice little subdivision at 10% of FMV a couple years ago doing this and made a bundle.

hatterasguy said:

Coming from someone who has put together neighboring parcels that is horrible advice. Really why would you tip your hand and screw yourself like that? Plus no one is going to agree to a closing date 10 years in the future, really?

I go threw great pains to distance myself from parcels if they are next to each other, and worth a ton more together than separate.

Once someone knows you need the land, the price goes up. Once one person knows everyone does.

I assembled a nice little subdivision at 10% of FMV a couple years ago doing this and made a bundle.

Click to expand...

I see your position. You seem like you'd have more experience in the development aspect than I would. How did you develop that subdivision?



Liberty, I agree with the assignment, which is what I said in scenario 1 just talked too much. Lol happens everytime I get off the phone with my lawyer.

Options is ideal for controlling any property (or group or properties) in any price range.

The very best and most thorough training about options is Jack Miller. He used options for 45 years and is the only person who taught a seminar about using options with real estate. Initially, it was a 5 day seminar. You literaly felt like you were drinking from a fire hose when you attended Jack's Options seminars.

You can see his primer book about options, Wealth Without Risks at
Wealth Without Risks E-book

Or his Introductory and/or Advanced Options Home Study course is at
Options Home Study Course | Real Estate Options

Did you know you can use options to reduce your estate taxes?

Did you know you can sell a house at close to your basis but keep an option for all of 1/2 of the upside? You get the house sold, avoid paying taxes, yet get paid later.

Did you know options are creditor proof?

Did you know you don't have to pay a penny in taxes on an option until it is exercised? (regardless of how much it is worth)

Did you know options can be long term as well as short term?

Did you know you can create tremendous cash flow by wrapping an option?

Did you know you can even do a 1031 exchange with an option?

The list goes on and on.

Options are the most powerful tool in a real estate entrepreneur's tool box. You really need to learn all you can about options then use then often.

The definition of specialized investment or maybe home represents buildings or maybe location intended to produce a profit, often via investment finance obtain or maybe procurement profit. On this you can get an enormous profit since the benefit of the real estate investment is obviously major.