In the first part of this chapter, I gave you the lowdown on why most of the property-flipping strategies being taught today are too expensive and hard to implement. Now, I tell you why real estate options are less risky, more profitable, and easier to use than 99 percent of all the property-flipping strategies being peddled today. I also tell you why it makes more financial sense to flip real estate options instead of properties. First off, when you buy an option rather than a property, you are not going to be saddled with the financial responsibilities that go along with outright property ownership. And you are not going to get stuck paying any of the costs that are involved in a typical property-flipping transaction. Plus, you will not have to jump through any flaming financial hoops in order to get some lender to give you a mortgage or deed of trust loan. You will never have to worry about being sued by a seller because you failed to close on the purchase of a property. But most importantly, when you flip an option, instead of a property, you do not need to worry about having title or escrow agents looking over your shoulder and checking to see if your deal meets with their approval. As you will learn in Chapter 19, when you flip or sell an option agreement to a third party, all you have to do is complete and sign an assignment of real estate option agreement and collect the assignment fee, and it is a done deal. And then it is off to the bank to cash your check!
I know an investor who specializes in buying options on properties that have been used as methamphetamine labs. His only buying criterion is that the property must be located within a 100-mile radius of Tampa. This guy is a real professional, who can turn a contaminated property around in 15 days or less. And just as soon as a property is cleaned up and certified as being fit for human habitation, he sells his option to another investor, who exercises the option and buys the property. This guy claims to be doing between 12 and 15 deals a year, with an average profit of $8,500 per property.
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