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Pedro:
I think I would try to make it pretty simple. You must have a certain feel for a price the property would sell for. Determine what profit you want to carve out and make your option strike price, loan payoff plus your profit. I am sure you will secure your option with a mortgage or a memorandum of option.
This is a real simple solution, I am sure you will get some more creative responses.
Don Wede
I got a call from a seller who needs to sell a house that is too big to work well as a rental. Also, it has bad financing.
I’d like to structure a short-term option to get the right to market and sell the house and split any proceeds above certain figure with the seller.
I am wondering what would be the best way to document it. Let’s say I want the seller to get the first $200,000 and split any amount over that figure 50/50.
I thought I could get an option to buy 1/2 interest for $100,000, but am thinking that technically I would need another option to buy the other half for 1/2 of the “market value”. If so, how would I write it? Or …
Can I get an option to buy the whole house and include a formula to split the profits?
Am I over engineering this? Any suggestions would be appreciated.
Thanks,
Pedro Machado
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