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I just added a video collection of cashflowdepot members talking about options.
See the video here
https://www.cashflowdepot.com/store/home-study-courses/options-home-study-course.aspxThe options home study courses are the deal of the week.
Hi, I’m going to write my first option. Would like some advise. The situation is: In CA, Sacramento. Our market has been rising quickly these last 6 mnths with the hedgefunds coming in and buying everything, just the last couple of weeks the market has softened. Little more inventory and not such a frenzy feel. Anyway, want to write an option next week that I won’t take title till the end of the year. There is a tenant that’s going to stay. So, we agree to a fair price today. I qualify for a loan so I would like to do that instead of borrowing hard money. Would I open escrow in December, have my inspections period, everythings good I want to go thru with the purchace. Any help on wording, or what I need to have in my contract to protect myself. Kim
Kim,
I hate to be so negative but I have to. Why oh why would you even consider bank financing. So may people on CFD are so against it. I had in the past used it, but have not in the last 8 years and never will again. You can do great business without it.Do me a favor, convince me on this deal that bank financing is the way to go.
Don Wede
I agree with Don. Do not buy with bank financing or hard money either.
If you can’t buy houses with seller financing or subject to a GOOD low fixed rate loan with no balloon, then don’t buy…. that’s my philosophy.
The market in California might look great today, but what happens when it takes a crash again and you are stuck with a loan that is more than the house is worth? It WILL happen… and probably in a few years.
Many california investors had to file bankruptcy because they bought houses with bank financing before the last crash.
There are so many great deals out there to buy with seller financing that there is just no reason to buy anything that requires bank financing or hard money loans
Kim,
You said you can do it for less if you use bank financing. I disagree, in the long run it could cost you almost everything because you have to sign personally.I agree with Jackie, owner financing or subject to. Also I would ad private money with an investor were both parties like the arrangement. Also consider non ownership but control with a option or lease option combination.
If none of the above work I would pass and go on to the next deal.
Don Wede
My two cents…Kim I’m in central California, two hours south of you. I can tell you that the RE market in CA is a big facade. Brokerage companies and RE agent are in on tactical plans to hold properties to drive up the price.
I learned the hard way not to deal with banks and agents. Hard money is overrated. There are other ways to structure deals with out the need to borrow the money. Sub 2, trade or owner carry is the best way to buy a house for yourself for long holding.
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