Archive for July, 2009

Bank!

Options give you the right to purchase property at a later date for a predetermined
amount. Real estate options can be structured as pure options or lease options. A pure
option is an agreement between you and the seller. For a flat fee, let’s say 1 percent of
the purchase price, you agree to buy the property in X number of days (e.g., 30 or 60
days). During this period of time you might fix the property or simply resell it to
someone and pocket the difference. Closings can even be set up to occur on the same day.
Of course, the downside is if you can’t resell the property, you could lose your option
money. A lease option allows you to lease a property for a certain amount of time (e.g.,
one year); at the end of the lease term you have first dibs at buying the property. If you
set the price ahead of time, you can use your own sweat equity to make improvements and
sell the property right when you acquire it.

Many times it is necessary to come up with money the old-fashioned way – by digging deep
in your own pockets. So how do you come up with money to close the deal? Here are some
creative ways: