Re: One way to do it, - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on January 14, 2001 at 13:50:07:
Is to use an option. An option is a contract that you would hold. In the option contract you and the seller would agree on a sale price for the property. I would use a “cash” sale price for a property that needs to be repaired. The seller agrees in the option to hold the price for a certain length of time, lets say six months. In exchange for the seller holding the price for six months you would give the seller some money, let us say $100 (this is called the option consideration). Now lets use the number of $50,000 as the amount that the seller agree that he will take, in cash for the property any time during the next six month period.
So at this point you have an option (the right to buy) at a strike price (sale price to the seller) of $50,000. You have $100 invested, and your deal is good for six months.
Now you have six months to look for a buyer who will pay more than $50,000 for the property. I would suggest a price increase of 5-10%, something comparable to a real estate commission. You will be selling your option, not the property. So you do not need a real estate license, because the option is personal property (a piece of paper), not real estate.
You then take the deal to your rehab buyer and offer the house to them for a mark up, say $55,000. They can get thier own financing. If they agree to pay $55,000 they can pay you $5,000, and you will assign the option that you have to them. They then close in your place, and you are out of the picture with $5,000.
When you get your $5,000 payment take the check to the bank. Get it cashed and get 100, $50 Bills. Take them home with you and count them several times. You will then start to get a “feel” for what can be done in this business by an 18 year old business person.
No credit check, no loan, no job, very little investment. just good honest legwork. Good luck.