By Peggy (4 comments) | Reply

Love this idea. A gal can’t have too many forms! Keep ‘em coming…

By Mark (5 comments) | Reply

This is great JP! Please do more of these videos/forms. I’m a newbie and this information is very helpful. Thank you!

By Daniel (1 comments) | Reply

That’s great thanks for doing that in more would be good as well. Not sure why but my doc scrambles with letters and dots and things all over the place. If you have a gmail account you can go to free google docs and export it as a PDF and it will be more universal and also professional and printable etc. It’s really easy at google documents. By Thanks for the option contract explaination. I need some learning for Australia but i guess it’s a similar concept America!

By Scott Taylor (4 comments) | Reply

Nice one JP. I’ve been using 30 and 45 day options to flip properties for the last 6 months. It works like a charm and is much easier than doing a double close. In fact, we’ll have to go over it sometime. It’s a great ‘low risk’ strategy…

Cheers,
taylor

By Ryan (1 comments) | Reply

I loved this Idea JP! you Rock! the Tutorial is awesome!

By Amaru (1 comments) | Reply

What do you know about FLex Options?

By Terry (1 comments) | Reply

Thanks JP! Would you be willing to roleplay and show us how you speak to sellers and answer their objections?

By jim (4 comments) | Reply

Just what I was looking for. Google is your friend JP, I may just stick around this site for a while.

By gary (4 comments) | Reply

Very Good , this IS the basics of wholesaling a house and as a beginner ( about to close my 1st deal ! yippie ) this is exactly how i did it and , i really hope you all out there use this info to get into or grow your business . and I can tell you this type of info isn’t out there for free like this is everywhere you go , my hat is off to the folks at REI tips for being straight up and letting you peek into what they do .,,, good job guys.

By Curtis (1 comments) | Reply

I appreciate you sharing this valuable information with all of us. Especially the newer investors. I found the contract easy to understand, but the video made it even easier. Please keep up the good work and thank you .

By Tim Cronin (3 comments) | Reply

Just wanted to know how to get option consideration to optioner if doing these deals cross country I.E. virtually. How do I get it back if deal doesn’t go thru? Will the money be applied as earnest money when switching from option to purch n sales agreement, or do I assign the option itself?Please let me know. Thanx.

By Dean (1 comments) | Reply

J P,
I’v just down loaded the forms and its always good to have different ones to use.The videos are a great help,really great,its like looking over you shoulder or being right there with ya.How can I save them to my hard drive and attach them to the forms?
Thanks Again,
Dean

By Swarup (1 comments) | Reply

Wow. Thanks very much jp. It’s awesome to see someone explain this stuff. I needed this! …and more of this kind of information.

By Dub (2 comments) | Reply

Great Video Tutorial JP! Very Informative and Easy To Grasp. This is the Tpye of Information I Love. Please Continue Making These Type Of Video Tutorials… With Relevant and Useful Information. Outstanding Job!

By Rachel (2 comments) | Reply

I was listening to your first video on viddler. By the way,
> it was great so is your entire website.
>
> My question about the option contract since you mentioned about
> assigning. Wouldn’t I need another contract to assign? I live in the
> state of Virginia. Would this work in VA?

By Paul (1 comments) | Reply

Hi thanks for the tutorials it is like having the ob1 of contracts in your ear

By Karl (6 comments) | Reply

JP, dissecting the purchase and sales agreement, the option contract, and the assignment contract were excellent. You are an excellent teacher, very clear and concise. Thank you.

Question: could the option agreement be revised slightly to tie down a contract on other personal properties such as boats, planes, or jewelry?

From JP: Great question. The answer is…I have no earthly idea. Sorry, but I’m blank on that one.

…jp

By Karl (6 comments) | Reply

So, JP, if you were beginning to learn wholesaling, would the combination of the option contract and the assignment contract be all needed to wholesale a property? Thanks.

You could definitely do it that way, Karl!

…jp

By Karl (6 comments) | Reply

Hey JP, one more related question. This is a tax related question: Could you deduct $100 from a self directed Roth IRA to put an option on a home and then assign the property and take the profits and keep it in your ROTH IRA? (turn $100 into $10,000 in a Roth and the $10,000 is now tax free upon withdrawal at 59 1/2 yrs of age?)

From JP: Karl, that’s a great question. And I have absolutely no idea. I’ve never dealt with the investing from your Roth IRA stuff. Anyone else out there that has wanna chime in?

By Gionki (1 comments) | Reply

Jp- As a Wholesaler,
1. How where are your top 3 ways you are marketing to investors your wholesaling service?
2. How are you keep your investor list clean?
3. Ever wholesaled a house from the MLS?

Great questions, Gionki. My quick answers are:

1) I got to a point where almost all my REI business happens through my network of friends and referrals and such. Most eventually get there. But at first I got a lot of leverage out of my REIA group meetings and networking there, and also I placed a couple of “dummy” ads in the paper to generate some calls.

2) I don’t have to clean it. I just keep up with who’s in a “buying mode” and what they’re interested in. Then when I come across a deal, I know pretty quick whether or not I have a potential buyer. I don’t deal with hundreds and hundreds of buyers. I prefer the more personal approach with a handful of players.

3) If you mean, listed a house in the MLS that I was wholesaling, then no. If you mean, contracted a house in the MLS, then wholesaled it, then yes.

Hope that helps!

…jp

By john (1 comments) | Reply

Have would you word a secondary offer cancellation and let the seller still market the property ?

Thanks

By Branson Real Estate (5 comments) | Reply

Seems like these are pretty solid contracts. I’m knee-deep in the real estate investing game myself. So, it’s nice to see like-minded people sharing useful resources.
Thanks!

By Arlen (3 comments) | Reply

This is excellent.

By Arlen (3 comments) | Reply

Watched your Option Agreement video. Well done. Just one question. Do you assign the option agreement when wholesaling, or when you have a buyer do you go ahead with the Sales Agreement and assign that?

Hi, Arlen. Great question.

If I’m using an option agreement in a transaction, there’s seldom a reason not to just assign the option contract to the new buyer. Unless for some reason there are some terms in there you’d not be comfortable with someone (your buyer) assuming.

Make sense?

…jp

By Billy (1 comments) | Reply

I have been trying to get started in wholesaling/assigning/flipping properties (whatever you want to call it). It sounds like a great way to get into investing in real estate w/o any cash/credit or job. But a Realtor I’ve spoken to stated that you still must have to come with cash in order to get a house under contract. The lender (bank or mortgage company, etc) wants to see a POF (Proof of Funds) letter. You just can’t tie up a property and put it under contract and assign it over to someone else unless you come with cash at the table. You must obtain funding in order to put a property under contract. Please advise. How do I get started with no job and no money? Thank You

Hi Billy, thanks for posting.

Your Realtor is what we call an “inside the box” thinker. He’s been trained by his broker and a myriad of real estate classes to see things only one way.

For example, whenever I’ve purchased a house from an individual (non-listed) property, as a result of my own direct marketing, I’ve yet to put any earnest money in their hands. Instead we use the contract itself as legal consideration, which is perfectly legal in TN (although most Realtors would tell you otherwise b/c of simple ignorance and assumptions).

It’s true most any Realtor worth his salt will ask for earnest money and a POF, but most is not all. For example, lately there’s been a trend on FDIC listed properties actually requesting verbal offers b/c they’re so desperate to move the dang things.

I’ve yet to find an REO listing that didn’t require those two items, however. So in the REO arena, you’ll just have to find a way to contend with it. You can still “wholesale” but you’ll just have to do a simultaneous closing or come up with transactional funding and do a double closing (which isn’t hard to do these days).

Hope that helps. I can’t write a whole book about it, but know that the limitations your Realtor sees can be overcome with creativity and an open mind. Start networking with the Realtors other investors in your area commonly partner with and maybe they’ll see a little different perspective.

My best,

…jp

By Diane Boerstler (2 comments) | Reply

Thank you so, so, so much for the free videos and contracts that you have provided on this website…they are SUPER helpful to a lay person like myself trying to get started and sort everything out…may all good things come to you now!

By Diane Boerstler (2 comments) | Reply

Thank you so so so much for explaining this process and including free forms…your willingness to give knowledge where others are taking without giving is truly amazing…

By JD (1 comments) | Reply

Great video, and info. Q, is there a way to use an Option on an REO? Thanks.

Hi, JD. I’ve never known of a way to use an option on an REO listing. They don’t want to get strung along. Only a buyer seems to fit in their box.

…jp

By Arlen (3 comments) | Reply

JP,

Lookin’ for more info. When you have an option on a property, and want to exercise that option, do you do that by then executing a Sales Agreement?

By Brian Dickerson (1 comments) | Reply

Great information. I’ve always found that sellers are relieved to see short, plain English forms like your short option. They’re much less intimidating to them, and make you look like the “easy” option.

Brian Dickerson´s last blog post..Double Your Browser Speed & Stop Spinning Your Wheels

By Beverly (1 comments) | Reply

great work,, very helpful please continue such good work.

By Ernest (5 comments) | Reply

Karl - according to Equity Trust Company you can do the option from a Roth IRA

They have educational materail on how to set it up correct so it past the IRS rules.

By KC (1 comments) | Reply

JP - Question re: option begin date and end date. How long do you want to tie the property up? And should the begin date be the date that you present the option to the seller? What if he delays signing a day or two or seven. This would then shorten your option time…right?

Hi, KC. Great question.

You can have the option term for whatever time frame makes sense. I’ll often use 30 days if I’m just looking to wholesale and I think I can get it done quickly. I’ve done 60 days. Some folks will do, like, a year. It’s just up to what makes sense to you.

The begin date: I’d make it a specific date, and also give them a deadline by which they need to sign/agree.

Hope that helps!

…jp

By Mike (2 comments) | Reply

JP On Option Contracts. Good videos with some super tips. However, me thinks maybe more important was your suggestion that listeners take a contract law class. I knew of this but just haven’t done it yet. So not I am, thanks to you, determined to give it a go if I can find one available. What’s that they say ” If you think education is expensive then try ignorance”.
I notice in a couple places you use the words “Option fee and then you call them a “down payment”. I’ve read other places where you should NOT call them a down payment. What’s up. Is there a difference? I brought this up here in case there is a difference then others would know of it. When you reply would you also PM me the answer as I do not visit these sites often. Thanks

Hi, Mike. Thanks for the props, and you know I agree - far too many underestimate the value of taking a contracts class.

To answer your question, it’s really just option consideration. If I used the words “down payment” it was just a slip of the tongue. The two should not be confused in my opinion.

My best,

…jp

By Jackie (1 comments) | Reply

Great info!! One question… say you found the house and you want to try to find a buyer. How do you know whether you should use a purchase agreement and then assign that or use an option agreement? I had heard before that the option agreement always allowed the seller to “keep looking” for a buyer and be able to sell if they found a buyer first. So I figured the difference would be the purchase agreement “locks” you in and the seller can’t sell it to anyone else and the option agreement gave you the opportunity to find a buyer while allowing the seller to still look too. But you’re saying that the option agreement gives you total rights to the property so what’s the difference - when would you use one versus the other?\

Hi, Jackie.

The option agreement is a unilaterial agreement and a purchase agreement is a bilateral agreement. In other words, in a purchase agreement, both the seller and buyer are on the hook to each other - one to sell and the other to buy. In an option, the seller is on the hook to sell *IF* the buyer does in fact elect to buy. But the “buyer” has the “option” to either move forward or not. Hence the name. You’ll see the terms of the option agreement lay this out pretty clearly.

No, the seller’s not supposed to have the automatic right to look for another buyer — unless you (as the optionee) elect to give him that right.

Personally I use an option with an individual seller (not a bank) when I’m honestly not sure if there’s a viable deal there for me or not. And I usually tell the seller if another buyer presents himself, they can come to me and tell me, and I”ll either close in 10 days based on our original terms, or I”ll release them to go with the new buyer. That helps them feel better about me “tying up” their property (which I’m not really doing after all — but I need the equitable interest in my court so I can legally market the property for resale without a real estate license).

Hope that helps!

…jp

By Karl (6 comments) | Reply

Hey JP, rookie question. Do banks allow you to control a property with an option contract? And do you as the buyer send your option contract to the bank to sign? Thanks.

Hi, Karl. No, I’m afraid they don’t. At least not for now. If things keep getting worse for them, you never know! Word on the street is the FDIC is now accepting verbal offers! Whooda thunk that woulda happened?

…jp

By Karl (6 comments) | Reply

Thanks for the info about Equity Trust Co.

By Karl (6 comments) | Reply

Hey JP, I hope this isn’t a dual posting, rookie questions: Will a bank allow you to use an option contract when purchasing a REO?

Secondly, who provides the contracts, the buyer or the seller?

By Ken Obrien (2 comments) | Reply

Great resource of information! Thanks JP. I will check your website regularly!!

By Cassandra (1 comments) | Reply

JP,I’ve never met ya,but I sure like ya! Thanks so much for the vids,the forms, but most of all for keepin’ it simple! This girl likes it simple ’cause life’s complicated enough. Great site.

By Franklin Homes (1 comments) | Reply

They have educational materail on how to set it up correct so it past the IRS rules.

By Ivan (1 comments) | Reply

appreciate you sharing the forms with us, they’re very helpful. Thanks for taking the time and effort