Kiss it off. - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on October 07, 2003 at 10:14:42:
There could be a downside to doing this.
You could make up such a form. But before you do consider this. Your buyer would know what you paid for it. Your seller would know that you would be getting twice as much for it as you will be paying him. If this isn’t a formula for disaster I don’t know what is. Everyone will likely resent you making so much money at their expense. Your seller and buyer may wonder just what they need you for and try to go around you. Even it everyone performs as agreed there will probably be hard feelings all around.
Now, what do you see as the upside to doing this that might make it practical for your situation?
This sort of thing IS commonly done. I don’t want to discourage you altogether if you really have it all together. Consider that flipping a contract or selling an option, sequentially, is similar to doing the same thing as you propose to do simultaneously. They are both done all the time.
In many areas, double escrows are possible although many escrow companies either don’t like to do them or refuse them altogether. They seem to be worried about lawsuit liability.
I know you would like to limit your need for cash and sell before you buy. We all like to do these things but I think the way you are considering is fraught with potential problems that outweigh the benefits of trying to do deals this way, especially if you are new to this game.
Flippping contracts tends to work well because you are generally selling to a prpofessional rehabber who either can’t buy wholesale or would rather spend his time hammering nails. He also knows that if he tries to go around you it will be the last deal he ever gets from you. With options you usually are dealing with a more sophisticated group of people and they all expect a price didfference between buy and sell because often a period of time has elapsed between them, and price inflation is expected more than resented.
Mick, I think your best policy is to Kiss it off. (KISS=keep it simple son).