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I would like to know the best ways to use option contracts to put houses
under contract and then be able to turn around and sell the option to
another investor for quick cash. What are the best terms for these types of
options? How do you structure the option so it is easier to attract buyers?
How do you find buyers for these option contracts? What type of
documentation do you need to sell the option?Thx/Rafael
Rafael,
Just use a regular purchase contract with a contingence clause that says you have to find another buyer before you will exercise your option – you’ll also need to put a timeframe on it – 30 days – 3 months, when you can make a 10% profit, etc.
If your buyer is getting financing, you’lll run in to a problem with seasoning if you are the seller. So, it may be necessary for you to get paid to terminate your option so the seller can sell directly to your buyer.
If your buyer is getting financing through a hard money lender or private lender, seasoning is usually not an issue.
Ideally, you’ll structure your contract with seller financing so you can pass that on to your buyer in the form of a wrap.
To sell your option – you are actually selling your contract. You can either use an assignment of contract or do a simultaneous close.
Jackie
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