Want To Do Straight Option, Quick Question
I want to make this a quick question and I need a quick answer. They owe two back payments totalling $4000.00. I want to do a staight option to purchase the house, but obviously don't want to pay the back payments, in case I don't buy the house. Can I still do an option, telling them there's a strong chance I can sell it within 30 days to someone who would then make up the back payments?
Short answer is YES you can do that.
Thanks...also, can I assign a straight option contract just as I can a standard purchase agreement. Or, would I have to do a double close?
If I do either of the above, would it be correct that the buyer I've found would be paying the closing costs? As an exagerrated example, say if I bought it (exercised the option) for $100,000, and sold it for $101,000, I would net $1000 without other costs?
I would say the biggest problem is the no credit or money. Sounds like you plan to screw the seller if you can't flip it. Not many willing to line up for a deal like that. Go to them with financing preapproval and make the earnest money non refundable and you will have plenty of business regardless of your age.
Ninteen Hmmmm. I bought an apartment house in occupied Paris when I was about your age. At the time I was AWOL from a Prisoner of War Camp in Germany. Recorded the deed with twoGestapo types standing behind the recorder of deeds. They never tipped. I looked the type had a cigarette hanging from my mouth, my hair slicked back and the funny clothes only a Frenchman would have warn way back in the 40's.
Dont let your age get in your way. I would change my tech a little. Instead of trying to steal properties I would concentrate on saving them for the person now in title. Just make a small fee like a couple of thousand each time you save them from their own mistakes. Learn to talk to banks, learn to get them to redo loans, put backdue payments on the back. Yes ever readjust interest rates. I know they say you can't but don't listen you can. Become an expert, merely learn everything there is to know.. Its a lot of fun. People say that doing good is its own reward. Don't you believe. it. During this time when you are tap city, why work hard at saving. Besides at your age you are not opinionated. You are flexable and you can absorb all the present stuff that the olders cannot learn anymore. So there man go do it.
See it works the same for old people. I am 82 and been doing this a very long time. Of course I don't ride a horse to work anymore and the Indians are all rich and owning Casinos. But just go do it. and enjoy it.
Cheers Lucius
lol, Lufos i like your humor. I have a question, what do you mean by saving the house instead of stealing?
Hey,
On the positive side, being young has some advantages:
One, you do not need to sleep. I need atleast 8 hours, but you can get by with only 5. That gives you almost 19% more waking hours then me to work deals, do research, send out letters, etc.
Two, you heal a lot faster then me. That is not just cuts and bruises, but also mentally.
That's the good news...now for the bad news.
You are facing an uphill battle. All things being equal, you will have a very hard time competing against people in their 30's, 40's, etc. The basic fact is a home owner looks at a 19 year old as a kid and NOT the salvation of their lives and credit. For example, imagine looking in the cockpit of an airplane...would you rather see a 19 year old or a 40 year old pilot?
Compounding that built in discrimination is the fact you do not have the same live experience as someone in their 30's or 40's. Call it WISDOM for want of a better word. Only age gives you wisdom (that is NOT implying that ALL older people are wise!).
As long as you are prepared for a lot of heartaches, you can be a success.
hey, i was ready your article and found it very interesting,also because i am also a young investor. The only advice i can spare is that regardless of any negative feedback you may encounter you still have to be a GO GETTER. So regardless of age just do it.
Have no fear my friend. I am a young investor also (22yrs old) and the whole "young kid" thing is only a factor if you make it one. These posts are right and we dont have years of experience and all the other blah blah, but you do have the energy of your youth that I think is a bigger advantage than the experiential disadvantage. When I am talking with my sellers they are the ones who need me. If I dont make a deal with them, no payday for me. If they dont make a deal with me, they might have a nice little foreclosure on their back. So we both have disadvantages! You speak with the seller with confidence and wearing a suitable business/business casual outfit and you guys should be okay.
Best Regards,
Steve
Do what it takes to make yourself 5-10k no matter which investing method you use. Flaunt it a little bit an people will take you more seriously(not a joke). I am 19 as well in the real estate profession. Luckily I have a 27 yr old partner I am getting into it with. But it took a little convincing that my ideas work. Now that I am buying a 4-plex and looking at $30k cars.... my family/friends take me a bit more seriously. Money talks more than anything else, age included.
Yes, the age thing sucks...I am the butt of prejudice with age all the time. The problem the people do not realize is we are the future. The 40-60 year olds are getting ready to retire and instead of trying to put you down should be passing along the torch. They have a legacy that they may want to die with them as opposed to helping you along.
Many do not want to bother with people of your age. It is because the majority 99% want to party, drink beer, and stay up late. They should be working retail or waiting on tables. You have goals and I say go for them. We are the leaders of tomorrow and need to start now.
Hunni25,
Don't allow age to stop you.
Sure, some folks who meet you and realize you are 19 will shy away.
Nature of humans I suppose, age to most equals wisdom and experience, which builds trust.
Trust is what is needed to develope a good working relationship with ANY client, whether that be a seller, a buyer, or even another investor.
At your age, ACTION and ATTITUDE is what will help you build that trust.
What I mean by that is to be serious.
Act your part.
When a home owner calls needing help, they expect to get a pro.
Be that pro, dress respectable, not a suit per say, just clean and nice clothes that you are comfortable in.
When speaking to sellers, look them in the eye and call them by name.
Listen more than you talk, and give succinct answers to questions.
After a deal or two has closed, folks will take you more seriously, simply based on your performance.
It also might help to build a credibility file.
This would be reference from anyone who has done business with you, or dealt with you.
Not necessarily REI related, just that you are a person of your word who PERFORMS according to your obligations.
Line up people for sellers to contact for reference, and you will go further.
A good friend of mine did his first wholesale deal at 19, with a partner,,,,,,,,,,,she was only 18.
Since then, this guy has done a few deals over the years, and was able to pay for himself to attend a major univeristy in the southwest with his profits.
He still invests part time as he is a student.
His credibility does not come from his appearance, as frankly, he still a few years later looks about 12 years old.
Instead, he acts the part, with confidence, and ability to solve problems.
that is all you need.
Sure, your age might stop some sellers from signing.............but not all.....by far not all.
A seller seeking a solution, and then presented one that works for them, whether presented by a 19 year old or a 45 year old, will jump on it, as long as it makes sense for them by solving the problem FAST!
Anyway, don't look for reasons not to do deals, instead, use your age to your advantage.
Posts like yours pop up all over online from time to time.
I'm suprised more folks have not said this to you:
"I ONLY WISH I had started at your age, go for it!"
And that is exactly how many of us 'old timers' feel.
Go get em,
Jim FL
[addsig]
TONS can be accomplished in RE with a phone, fax, and email.
Your first couple of deals will be tough because it might be obvious that you aren't experienced. With each deal that you do, get a letter from them explaining how you helped them out of a bind. By the time you're 20 you'll have $200K net worth and a nice little folder filled with letters, HUD's, and REPC's. That will give you credibility.
That isn't to say that you can't do it now, but it will be one more card to play.
The age thing should not be an issue. I was 23 when I started and a "girl". As I was called back then. I started with a duplex that was owner occupied. Now I own many multi units. Because of your age and being male, I would suggest retailing houses. You could buy a house with hard money, fix it up, and sell it to a owner-occupied buyer. You could then reinvest the money into your next deal.
As stated above your age would benefit you in this scenario
Lori
[addsig]
Thank You guys, i really really apreciate everyone taking the time to respond. I feel so much better. I have so much drive and determination to get started, i'm just trying to find a partner that is as serious about this as i am. Thanks again.
I think you should go for it.
I'm young (19) as well. I have been reading and trying to be apart of this business since I was 17. Until now, I haven't gotten completely serious about it because I felt I was too young and didn't have any credentials (money, experience, knowledge, partners).
Now my brother (he's 25) and I are working as partners and we are concentrating on doing wholesale/rehab/retail deals because we have hard money to work with (we got an equity loan from the house we live in - actually, we just did the closing and are waiting for the money!) and we are close to quite a few contractors in the area.
I agree with what people are saying here. I honestly don't think age is enough of a factor as long as you can show that you are legit and simply solving the problem. Which you sound like you can definitely do.
hunni25, age is not an obsticle unless you allow it to be one. I'm 42 now and wish I'd started in REI when I was you age...I could buy that island by now.
Seriously, keep doing what you love (REI) and invest in your greatest asset...YOU! Stay around people who are throwing gasoline on your fire and not water.
I added a few of my favorite quotes below on age and life. Never give up...Cheers to your success!
-------------------------------------------------------
Dream as if you'll live forever. Live as if you'll die today.
— James Dean
Inside every older person is a younger person wondering what the hell happened.
— anonymous
Midlife — when you decide not to kill yourself because you realize you are going to die anyway.
— anonymous
If we listened to our intellect, we'd never have a love affair. We'd never have a friendship. We'd never go into business because we'd be cynical. Well that's nonsense. You've got to jump off cliffs all the time and build your wings on the way down.
— Ray Bradbury
You are your greatest asset. Put your time, effort and money into training, grooming, and encouraging your greatest asset.
— Tom Hopkins
But I was so much older then,
I'm younger than that now.
— Bob Dylan, "My Back Pages"
My youngest student was 16 and he worked through his dad for contract purposes and this young man made around 12k on his 1st real estate deal.
Ultimately, whether youth is an advantage or disadvantage depends on you. If you position your age as an advantage (regardless of what it is)... it will be an advantage. It's all about how you market yourself.
Don't get too hung up on age -- concentrate instead on your real qualifications and strengths.
Youth is a terrible disadvantage, lack of experience, lack of resourses, lack of education, easily distracted.
Youth is a huge advantage, lots of energy, lack of other obligations which tend to hinder older investors time, creativity abounds.
Old age is a huge advantage, nothing like a few gray hairs to lend credibility in a negotiation.
Old age is a terrible disadvantage, stuck in your ways, hard to learn new ideas, less energy, less time, less room to recover from mistakes.
In the end it is irrelevant. Young is what you are. You cannot change it. Someday it will be that old is what you are.
Try to concentrate on the factors you actually have some control over.
You guys are great, thank you so much for all this encouragement.
I agree. 25 here. I used to get a little anxious before meeting with sellers because I felt my age may take away from my credibility. You'll find out it usually doesnt. The way I look at it is even if you don't land the deal...youre still getting great practice and will be way ahead of the game. The more you do it, the more comfortable you'll feel and that will show when presenting yourself to the seller. Don't expect too much off your first few meetings, just have fun with it and look at it as practice. Good luck!
...i'm only 19 and i'm getting negative feedback friom a couple people saying "your too young you can't do this" ...
Tell them to go straight to "heck" and don't let them or anyone stop you from succeeding. You'll soon be making a lot of money and can go back to visit them, and I'm sure they won't be very happy, AT ALL.
Also, think of how to use your youth to your advantage.