Example of a Pure Option at Work

In 2020, I knocked on the door of a homeowner. I told him we loved his neighborhood and wanted to buy a home there. Did he know anyone thinking of selling?

As it turned out, he was about to put his home up for sale because he and his wife could no longer afford to pay their property taxes. Though their house would be paid off in a couple of years, due to being on fixed incomes, they were being forced to sell even though they loved their house and didn’t want to move.

Here’s how a Pure Option fixed this homeowner’s real estate problem.

The homeowner said his home was worth $175,000. I agreed to pay his yearly property taxes. In exchange, he gave me the right to buy his home in the next twenty years for $175,000. Also, for each $1.00 we paid in property taxes, the purchase price would be reduced by $1.50. We also agreed to not exercise our Option to buy the property for the first 10 years of the 20-year option unless he moved from the home.

This was a win-win deal. The homeowner was not forced to sell and move. We would capture all the appreciation gain on the property for the next twenty years.

How often have you met with a homeowner who DOESN’T want to sell, but until now, you’ve been unable to help that person solve their real estate problem?

Have you ever run into a homeowner with a situation like this? Pure Options are one of the least understood and least used deal structuring tools in real estate.  Now you know what to do!

Article 1 of 5 – See all

Bill Cook Editor
Bill and Kim Cook are a husband and wife real estate investing team. Their core belief is that real estate investing is not about buying, selling or renting property. It’s about helping folks solve their real estate problems.
X