Re: Clarify a point or two - Posted by TRandle (TX)
Posted by TRandle (TX) on February 17, 2002 at 23:30:38:
Yes, the lender wanted half now and half over the next three months. No, the seller is not paying anything other than the $1,500 he’s already paid. No, I’m not making anything up front.
Yes, I’ll pay approximately 2k spread over the next three months for $200+ per month and a 30k backend.
At the time this happened, I had seven vacant properties and two non-paying/late-paying tenants. I’ve been carrying a number of properties for quite some time and I got tired of it. The folks with cash disappeared for about 6 weeks and only recently resurfaced with tax refunds coming.
As far as my philosophy on the option fee, yes it’s advisable to stick to your guns, if you can afford it and if it won’t cost you more in the long run. In my limited experience, you’ll end up with higher quality tenants that way.
I’ve run across few “textbook” deals as the gurus detail. Each deal is at least slightly different and cash needs will frequently dictate my course of action, which may be contrary to the “conventional creative wisdom” freely espoused.
There are no hard and fast rules in this biz, only guidelines, and even those can vary by market.
As a side note, it was probably less than a year ago that I semi-jumped on one of my friendly competitors for considering accepting less than 3% up front. I later told him in private that I had done it myself, but that I didn’t think it was a smart move. I still don’t.
Hope that helps some…