Option vs Seller Financing

TRANSCRIPTION

Hey, this is Terry Hale, I just want to take a few minutes and chat with you
About a project, a client of mine, we’re pursuing this – this project is really great.
It’s a 54-unit apartment. And it’s got tremendous upside couple million dollars
And upside on this one. It’s in a key area. And what’s wild is my strategies and techniques
Actually, they work in this scenario but not as we planned.
We originally were going to go in for seller financing, and the guy just didn’t want
To do a seller carry. So what we ended up pursuing was an option.
Now that option, the way it worked is we have a management operating agreement,
And then we executed an option to purchase the property. So we set a price today,
And the price that we set was $2,250,000. You might think to yourself, well,
“Terry, I don’t have $2,250,000 to do this deal.” So, don’t worry about it.
The way the strategy came about, we put down $50,000. The 50,000 down
Is non-refundable, but it gave us that that lock-in. So we control the property.
We have exactly 60 months, five years to pursue the property and close on it
With a formal closing. And we also have that option agreement assignable.
So, we technically don’t have to close on it with our personal names or anything like that,
We can sell the option. There’s a couple million bucks in the table will be worth like
Four and a half and change. When it’s all said and done because the area is so hot.
And we got in, like I said for 50,000. That’s the difference between a deposit
And a down payment. If it would have been a seller finance note, they probably
Would have wanted like anywhere from 10% to 20% down. But we ended up
Getting in really light because it’s not considered a down payment,
It’s a non-refundable deposit. Alright. So for this segment,
Non-refundable deposit option agreement. Management agreement to let us control
And have operations of the property with a $2 million upside.
Congratulations, Leslie. Whoo! I know she’s happy. All right. So if you like this,
Go ahead and click the segment or better yet, just go over to https://terryhale.com/.
That’s T-E-R-R-YH-A-L-E https://terryhale.com/
And I look forward to engaging with you guys here real soon. Take care.