Ajay Kamat
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A Lease is a right to possession, an option is a right to buy. Can I give the right of possession and right to buy in an option, which is shown in the introduction to options pdf in the DUE-ON-SALE option. I am of the opinion I can write anything I want in a contract as long as both parties agree. I hope I am clear. My goal is to sell a house on an option for let say 11 months and get it back, I dont want to rent.
Example
ARV = 200,000
Sell Price = 400,000Option to buy the house in next 12months @ $400,000 who is going to buy and who is going to loan, thats the catch.
I collect $1000 as option consideration and 1st months option consideration $1000 I collect $2000 option consideration.
Option gets renewed automatically every 30 days so option gets renewed 12 times on 12th renewal the person signs a release of option and I refund $1000 for signing the release. If they want to live longer you can strike the same deal or may be something more creative 🙂
What can go wrong with this? All views are welcome
Regards
AjayHi All,
I would first ask the landlord if he has any liquid cash or generate any liquid cash and then see how much monthly payments I will have to make, let say if I have to make $500/mth payment I would buy an option for 5 yrs and wrap with 20% discount to buy each property and what ever cash for keys payment I make to the tenants to get out would be my down payment on both the house, I would do this deal only when the tenant confirms they will move out, I can even master lease from the landlord to make sure how much rent can be managed from the new tenants. The landlord can pay me back my money + 10% when he is in a good position.
Regards
AjayTexas Property Code, Chapter 5, Subchapter D, Section 5.061 et seq. – Executory Contract for Conveyance
TEXAS PROPERTY CODECHAPTER 5. CONVEYANCES.
SUBCHAPTER D. EXECUTORY CONTRACT FOR CONVEYANCE
Sec. 5.061. DEFINITION. In this subchapter, “default” means the failure to:
(1) make a timely payment; or
(2) comply with a term of an executory contract.
Added by Acts 1995, 74th Leg., ch. 994, Sec. 2, eff. Sept. 1, 1995. Renumbered from Property Code Sec. 5.065 and amended by Act 2001, 77th Leg., ch. 693, Sec. 1, Sept. 1, 2001.
Sec. 5.062. APPLICABILITY. (a) This subchapter applies only to a transaction involving an executory contract for conveyance of real property used or to be used as the purchaser’s residence or as the residence of a person related to the purchaser within the second degree by consanguinity or affinity, as determined under Chapter 573, Government Code. For purposes of this subchapter, and only for the purposes of this subchapter:
(1) a lot measuring one acre or less is presumed to be residential property; and
(2) an option to purchase real property that includes or is combined or executed concurrently with a residential lease agreement, together with the lease, is considered an executory contract for conveyance of real property.
I am posting this for entertainment and education purposes only.
As rightfully taught by Jack Miller option is a right to buy not an interest in real property.
I am so grateful to all his teachings which I started on March 13th 2020. It was a Friday and Dallas county judge ordered a shelter in place order and I thought of finding all the legends of real estate investing b4 1981 I was born and came across Jack Miller
Texas Property Code, Chapter 5, Subchapter D, Section 5.061 et seq. – Executory Contract for Conveyance
TEXAS PROPERTY CODECHAPTER 5. CONVEYANCES.
SUBCHAPTER D. EXECUTORY CONTRACT FOR CONVEYANCE
Sec. 5.061. DEFINITION. In this subchapter, “default” means the failure to:
(1) make a timely payment; or
(2) comply with a term of an executory contract.
Added by Acts 1995, 74th Leg., ch. 994, Sec. 2, eff. Sept. 1, 1995. Renumbered from Property Code Sec. 5.065 and amended by Act 2001, 77th Leg., ch. 693, Sec. 1, Sept. 1, 2001.
Sec. 5.062. APPLICABILITY. (a) This subchapter applies only to a transaction involving an executory contract for conveyance of real property used or to be used as the purchaser’s residence or as the residence of a person related to the purchaser within the second degree by consanguinity or affinity, as determined under Chapter 573, Government Code. For purposes of this subchapter, and only for the purposes of this subchapter:
(1) a lot measuring one acre or less is presumed to be residential property; and
(2) an option to purchase real property that includes or is combined or executed concurrently with a residential lease agreement, together with the lease, is considered an executory contract for conveyance of real property.
I am grateful to all the teachings of Jack Miller
There is an article by LoneStarLaw.com if you google search “Lease Options in Texas” it states Options are not mentioned in property code.
Regards
Ajay
