How to Start Small w. Little Risk and More...

A few weeks ago, I rec'd this very good question about Options from a new LOS Member I thought you might find beneficial...

Q: if i start with options [using to buy properties]: who sits during the closing, the owner and the buyer, since i don't really own the property? if so, does the owner then find out that i sold the property for a higher price?

A: Keep this in mind: You are in business to make money and it's ok that you make a lot of it. Never worry about what a new buyer might think, etc. as they have no earthly idea what you did or how much you may or may not have spent to get the property or get it in the shape it is in. most folks already think, as a dentist, that you get paid too much, not realizing the risks, overhead, liabilities, etc. you face. so...this probably won't be anything new for you! ok...

When you get an option on the property, there is more than one way to close the deal.

Here's what we do: We close on the house, exercising our option. We then, in another room, 2 minutes away (or in the same room) sign the paperwork to sell the house to the new buyer. this is called a simultaneous closing.

There is another way to do this too, and it has to do with "converting" the option to a lien (like a 2nd or 3rd mortgage type deal) on the property and basically, assigning the option to the new buyer and when they close, your lien is paid off (what your expected profit is is the lien amt) at closing and it's shown on the HUD-1 as a lien to satisfy prior to closing.

I don't go to closings unless I have to, and it's been some time since then. I have the paperwork emailed to Melody in my ofc, review it, sign it, have her notarize it and have her take it back to the title co or overnight it, depending on the location. On simultaneous closings, as in the example above, where you close on the purchase, then, turn and close on the sale, are done the same way...The title ofc records the purchase by me first, then the sale by me, second.

~Jerry

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