In last week’s column, we described what an option is and the advantages of using them.  This week, let’s look at a couple of different types of options in action.  (If you missed last week’s column, you’ll find it here.)

Let’s begin with the type of option that most folks are familiar with – lease options.  Lease options are best structured using two documents – a lease contract and an option contract.  The lease outlines the agreement between the landlord and tenant regarding property rental. The option outlines the agreement between the property owner (usually the landlord) and the tenant regarding the tenant’s right to buy the property.

There is a big difference between a lease purchase and a lease option.  With a lease purchase, the tenant is saying he WILL buy the property.  With a lease option, the tenant is saying he MAY buy the property.  A lease option locks the property owner into selling the property according to the agreed-to terms and conditions outlined in the option agreement.  On the other hand, the tenant can exercise his option and buy the property or he can simply walk away.  For most buyers, if their goal is to buy the property in the future, a lease option is a better, safer way to go. Read More→

Kim and I have been investing in real estate since 1995.  Long ago, we learned that options are – BY FAR – the most powerful tool in real estate.  If you are not using options as one of your primary real estate investing tools, then you’re leaving a lot of money and opportunity on the table.

When most folks hear the word “option,” they automatically think lease options.  While lease options are very popular, they are just the tip of the option iceberg.

Options allow you to control a property – a little or a lot depending on how the option is written – without the risks that come with property ownership.  You can control one or all of the benefits that come with ownership: income, profit, amortization, growth, use, management, and tax benefits.

One of the best things about options is that you can control hundreds of thousands of dollars worth of real estate for less than $100 – and control it for a bunch of years.  No other document in real estate is this powerful! Read More→

These days, with so much negative information out there pummeling us every day, it’s critical that we counterbalance all the doom and gloom news with twice as much positive information and stories.

For example, Kim and I spent this past week in Florida. One morning we went yard selling. This particular day, we came across a guy who was selling almost everything he owned. Turned out he was losing his home to foreclosure and had to be moved out in a couple of days.

The guy was so negative we had to stand a few extra steps back to ensure we didn’t catch his negative funk. He blamed his situation on the government, the banks, rich folks, the economy, BP Oil, Presidents Obama and Bush, etc. Never once did he take any responsibility for getting himself into his financial mess. Read More→

You’ve done great! You bought an investment property, did an outstanding rehab and listed it with your realtor. Then it happens: You get a written offer from a potential buyer. Now what?

Let’s first look at what’s normally done, then look at another way that may work better.

Your realtor emails you the offer that is usually lower – sometimes a lot lower – than your asking price. Also, the seller is regularly asked to pay a portion of the buyer’s closing costs. Lastly, you’re given two days to respond to the buyer’s offer. Read More→

“Real Estate Investing, In My Opinion, Is One of the Greatest Business Opportunities Available to Everyone, Regardless of the Investors Credit Score and Cash Reserves.”

When I started over 30 years ago I had neither good credit nor money to buy real estate. All I had was a burning desire to create money to care for my family and live a lifestyle I could only dream of at the time. At that time in my life it took all the money I could earn just to feed and clothe my 6 children. I’m sure many of you today, like myself back then, are unable to get a loan even if you try, but why let that stop you from participating in one of the greatest and most profitable businesses known to mankind. Did you know that more millionaires have been created from real estate than any other business?

Because I started with no money and not-so-good credit, I had to be creative structuring every deal I did, or I wouldn’t be able to buy any properties. As I look back, for me it was a blessing because it quickly taught me how to use what I had, which wasn’t much, to get what I wanted. Now, today as investors are finding it nearly impossible to find financing for the deals they do, it is essential for you to know that if any property you look at is not a foreclosure or Bank owned, every other property you look at will always fall into one of three categories. I will thoroughly explain on June 4^th, 2012 when I speak at your Atlanta REIA Main Monthly Meeting. Once I learned about the 4 Pillars of real estate investing, it truly changed the way I did business from that day forward. Read More→

When Kim and I were in our thirties, we knew we needed to start preparing for our retirement years.  We both had family and friends who were in their mid-sixties and had to keep working because they couldn’t afford to retire.  (Social Security is no substitute for a retirement plan!)

Our big concern was where to invest.  My folks had done well in the stock market.  Kim’s had done well investing in real estate – they owned rental property.  Kim and I decided that real estate was the best way for us to go.

OK, we’ve all heard lots of landlord-tenant horror stories.  Sadly, because of these stories, not many folks view rental property as an excellent retirement vehicle.  But consider this: When you retire, if you own 10 paid-for rental homes that average $800 a month in rental income, would the $8,000 a month these homes provide help you to live better during your golden years? Read More→

Landlords – especially new landlords – often wonder (and worry) whether they are using an effective lease agreement.  Truth is, most landlords use terrible agreements.

When we bought our first rental property in 1995, we didn’t know anything about managing rental property or tenants.  Needless to say, we also knew nothing about lease agreements.  The realtor we used gave us a lease written by the Georgia Association of Realtors (GAR).  We thought it was the greatest document ever written! Read More→

It’s really frustrating when a real estate investor calls to ask for advice, then argues when he doesn’t like the advice I give – especially when the advice is square dead-on.

Last July, an investor – we’ll call him David – called asking about a “once-in-a-lifetime” opportunity that he had been told about.  It was a three-bedroom, one-bath home in downtown Atlanta that he could buy for just over $14,000, rehab quickly for $7,000, then sell for $75,000 to pocket a cool $54,000 profit.  Needless to say the investor was hot to trot.

A wholesaler brought David the deal.  A wholesaler is someone who finds a deal, gets it under contract, and then assigns (sells) the contract to an investor.  There are good and bad wholesalers out there… but this was one of the bad ones. Read More→

Some days, things go all wrong.  Other days, things happen that are so funny you can’t help but to blow milk out of your nose!  Really interesting days are when both of these things happen at the same time!

At April’s foreclosure auction, we bought a property on Autumn Place in White, Georgia.  It’s a very nice 3-bedroom, 2-bath home built in 2005.  It just needs a shave and a haircut (paint and carpet) before we can list it with our realtor.

Kim and I have been buying foreclosure properties since 1995.   The first mystery we had to solve was how to bid on a property at the foreclosure auction.  The second was what to do if we were the high bidder. Read More→