Part Two Of Two

BUYING OPTIONS AVAILABLE
TO REAL ESTATE BUYERS & SELLERS

1) Cash to existing mortgage

2) Cash to down and refinancing

3) Cash down with seller taking back the contract, second mortgage,
etc.

4) Some cash plus equity in other property

5) Cash plus mortgage on other property

6) No cash but equity in other property

7) No cash, equity plus mortgage on purchased property

8) No cash, equity plus mortgage on other property

9) No cash, mortgage on purchased property

10) No cash, mortgage on other property

11) No cash, wrap-around where seller carries paper with or
without a promissory note.

12) No cash, unsecured note for complete equity

NEGOTIATE “LOW” & “LONG” TERMS

Always think in terms of 1) Low Interest; 2) Low Monthly Payments; and 3) Long-Term Payoffs as you develop home buying transactions. Make a transaction benefit you by negotiating hard all the way. Decide ahead of time what your “No-Deal”! cut-off point is. Be prepared to walk away from any deal that goes beyond your low-interest and low-payment cut-off. And remember, the longer the payback terms the better off you will be. High interest rates, high payments, and short-term payoffs can destroy a fledgling financial situation.

INCREDIBLE BARGAINS ARE EVERYWHERE!

It only requires a simple search to find great real estate buys that require no down payments or credit checks. You can start your search by picking up newspapers in and around the area you are interested in. Then carefully review the classified real estate ads and begin contacting both home owners and real estate agents. Don’t be afraid to call agents! They might provide the lead that leads you to your dream home. Keep a list of your contacts and note the results. Make a minimum of 3-4 contacts every day. You will know who the really motivated sellers are through conversation. Then, if you are interested, take advantage of the situation and follow through.

HOW YOU CAN PROFIT BY OBTAINING OPTIONS

Obtaining an option to purchase real estate can make you some fast and easy profits. When it comes to real estate, options favor a buyer over the seller 10 to 1!

Here’s how an option to buy can make you huge amounts of money:

To begin with, find a piece of property that is priced to sell at under market value. Let’s say that the property you decide on is priced at $99,000 but the actual market value is $125,000. And remember, these kinds of bargains are available everywhere! Your next step is to tie up the property with an option, which may or may not require a modest options fee.

Let’s say that the property increases in value by only 10% during the period of time you hold your option, which in many parts of the country might be a very modest increase. Now you would have an option to buy property that is now worth $137,500, still for $99,000. Now you have and incredible opportunity to make a $38,500 profit!

Options are favorable to the buyer over the seller because at the end of the option period, the potential buyer can exercise his option if conditions are favorable and make a tremendous profit from the transaction. On the other hand, he can also walk away from the deal if conditions appear unfavorable.

USE CONTINGENCY CLAUSES WHEREVER NECESSARY

Contingency clauses can give you many advantages when you are ready to make a deal. Contingency clauses can stack real estate agreements in your favor. What you are doing in effect, is specifying certain conditions that allow a contract agreement to be valid.

Basically, there are two reasons for using contingency clauses:

1) The contingency clause is of great importance to the deal; and

2) You simply want more time and are using a contingency clause
to get it.

Some of the typical reasons for these clauses include statements such as:
1) Contingent on buyer arranging suitable financing; 2) Contingent on buyer selling his property before the deal is valid; 3) Contingent on appraisal; 4) Contingent on the buyer’s accountant or attorney inspecting all records; or, 5) Contingent on the seller agreeing to your specific terms, etc.

DELAYED DOWN PAYMENT CONSIDERATIONS

If the seller absolutely demands all or part of the down payment in cash, don’t exclude the possibility of agreeing on a “Delayed Down Payment.” This tactical move should at least be considered, especially if you have already lined up a buyer for a fast resale

DON’T OVERLOOK SELLERS
AS A SOURCE OF INVESTMENT CAPITAL

The same person you are buying property from may also act as your lender. Today, sellers are lending money to buyers in almost half of real estate transactions. The borrowed equity is secured by either a personal note, or a second or third mortgage. This method amounts to lending money to the buying party.

USE FIRST AND SECOND NOTES INSTEAD OF CASH

Sadac Israel and IIM