Strategic Options,  Tactical Options,  Right of First Refusal Options,  Extension Options,  Buy-Back Options,  Porcupine Options &  the always wonderful Magic Options

When real estate investors hear the word “Options,” most automatically think Lease Options.  

A Lease Option is not a single deal structuring tool.  Rather, it’s two deal structuring tools (a Lease and an Option) working together to make a single transaction work.  A Lease Optionsimply means the holder has the right to use the property, plus the holder has the right to buy the property within a pre-agreed-to time frame, for a pre-agreed-to price, and for pre-agreed-to terms.

Sadly, here’s something 99% of real estate investors DON’T know: The above structure barely scratches the surface of an Option’s full power as a creative deal structuring tool.

To give you a glimpse of what’s behind the curtain so you can better understand the full power of Options, let’s look at a deal Kim and I are currently doing in Tampa, Florida.

On October 7, 2023, we, along with the seller, signed a purchase and sale agreement.  We agreed to buy the seller’s property for $180,000.  The seller agreed to the following terms: Nothing down, zero interest, with 450 monthly payments of $400.

The seller needed a quick sale because her free-and-clear house was scheduled to be sold at the property tax auction in Hillsborough County on December 21, 2023.  If this happened, she’d lose her house and all her equity, which totals about $225,000.

The seller owed unpaid property taxes for 2020, 2021, and 2022, which totaled more than $13,000.

After signing the contract, Kim and I left the country to spend three weeks in Spain, followed by a two-week transatlantic cruise from Barcelona, Spain back to Fort Lauderdale, Florida.

During our trip, with the help of Suann our closer, we discovered the seller did not have clear title to her property.  Both she and her mom owned the property.  Her mom passed in 2022.  Her mom’s estate had not been probated.  For the seller to sell us her property, her mother’s estate would first need to be probated.  Unfortunately, the seller did not have the money to pay for this.

In addition, we learned the seller had three credit card judgements against her.  The judgements totaled $6,621.53.  Because of Florida law, these three judgments would need to be paid before we would agree to buy the seller’s property.  

Upon learning about the seller’s estate problem, and learning about the credit card liens, and knowing the property was scheduled to be sold at the December 21, 2023, property tax auction, what would YOU do?

Most investors would run, not walk, from this deal!

You see, time became our enemy.  We needed time to negotiate the credit card judgements down and get them paid.  We needed time to get the seller’s mom’s estate probated so the seller would have clear title and be able to sell us her property.  We needed to accomplish these two things BEFORE the December 21, 2023, property tax auction.

Because of the Thanksgiving and Christmas holidays, there was no way to accomplish all we needed to accomplish to buy this $225,000 house for $180,000, while getting nothing-down, 0% interest, owner financing.

We needed to stop the clock.  Say hello to my little friend…Mr. Pure Option!

First, because we agreed to pay to probate the seller’s mom’s estate, the seller agreed to lower her sale price from $180,000 down to $165,000.  The new seller-financed terms were nothing down, 0% interest, 330 monthly payments of $500.

Second, we agreed to pay off the seller’s property tax judgment BEFORE we purchased the property.  This payoff totaled $13,636.82.

By paying her property tax judgement in early December before owning the house, the seller would no longer be at risk of losing her house…and all of her equity…on December 21, 2023, at the property tax auction.

By agreeing to do this BEFORE owning the property, do you see that Kim and I now had a lot to lose?  How on earth could we protect ourselves? 

On November 28, 2023, after returning from Spain, we switched from an UNSECURED purchase and sale agreement to a SECURED Option contract.  This Option gave Kim and me the right to buy the seller’s house anytime in the next 40 years for $165,000.  The consideration we gave was our paying off the seller’s property tax judgement before the December 21, 2023, tax auction.

I know this is a lot to absorb.  Right now, many real estate investors who are reading this are scratching their heads in bewilderment.  Know this: This advanced creative deal structure is allowing us to do this deal safely and with even greater profit!

As of today, January 4, 2023, the seller’s property taxes have been paid and the property tax auction was cancelled.  The seller’s mom’s estate has been escrowed and the seller can now sell us her property.  Finally, Kim successfully negotiated down and then paid off the seller’s credit card liens.  We’re due to buy this property in the next seven days!

The full writeup on this deal, along with the documents and secured Option contract used to make this creative structure work will be shared at our Power of Options seminar on February 3 & 4, 2024 in Tampa, Florida.

And just when you thought it was safe to go back in the water, one other thing happened with this deal you need to know about.  On December 10, 2023, AFTER paying off the seller’s back property taxes, Kim and I met with the seller to give her an update.  Imagine our surprise when the seller proudly pointed at the new $51,000 solar panels she had installed – but not paid for – on her (soon to be our) roof two days before.  Ruh roh Elroy!!!

Question: In this case, which would you rather have, an unsecured 60-day purchase and sale contract or a 40-year SECURED Option contract?

With the solar panel problem, I bet you’re wondering whether we’re still buying this investment property.  Absolutely!  How and why?  You’ll have to join us at our Power of Options seminar on February 3, & 4, 2024, in Tampa, Florida to get The Rest of the Story!  

How can I use an Option? 

• Buy a property
• Sell a property
• Park a property
• Protect a property
• Help someone who DOESN'T want to sell their home
• Help someone who needs money but can't get a loan
• Help someone buy a property they can't possibly afford for a price they can easily afford
• Sell a property and still keep the appreciation
• Capture a property's appreciation and amortization on a property you don't yet own
• Sell a property for a seller who doesn't want to use a realtor

You may be asking, "With so many uses, why haven't I heard about the Power of Options before?"

Well you are asking the wrong question, my friend.  You should be asking yourself, "With so many uses, where do I go to learn how to use Options?" 

At Bill Cook's The Power of Options Seminar, of course!