Options are the Ultimate Leverage Tool.

After sending out the "why you need to learn about options" email on Wednesday, I received the following reply.
I'm hoping to get the author of this email on an upcoming conference call.

As Jack Miller would say, Options are the Ultimate Leverage Tool.

Keep those option deal stories coming!!

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Jackie:
I learned options from Jack directly, and they accounted for my best deals.

1. Acquired $1,000 options on 8 parcels of land for a total of $1.1MM, then closed when I controlled them all, then sold for $3.5MM when the profit from selling looked better than the risky development I had had in mind.

2. Acquired 7 acres near freeway for $80k, then immediately resold for $380k... got chicken before the resale closed and closed the option with $20k cash, because, although I wanted bragging rights to a no-cash deal, the profit was too much for me to risk. Took back a note for $279k, then sold the note back to the land buyer (probably the only person in the world who might have bought the note) for $200k cash (after she checked with her astrologer to find the most propitious day to close the escrow).

3. Got acceptance from the seller on $9.9MM ranch because, although he was a $10 millionaire in land, he had no cash. This was a problem for him because he was a devout Mormon, and his son was nearly 18 (and had to go on mission in the UK before he turned 18), but the family had no money to send him. The day after we verified title (and got a title policy on the option interest... one of the questions you mentioned you had), he was down at Security Pacific cashing the $40k option money cashier's check to send his boy to the UK. He got the cash in just a few days (instead of the months that it takes to do due diligence on a large development, and often large proposed developments never produce any cash for the seller at all) and we put into escrow a deal that all the local brokers working on it had not been able to do for years, despite their efforts. This was also a deal which the billionaire developer/buyer partner who had choppered to the ranch twice (and gotten oral assurances both times that the seller subsequently breached) could not seal up, either. We then used additional options to make offers to other large land owners that gave them 1% of the purchase price, instead of just tying their land up with purchase agreements containing developmental weasel-words. They likely would not have "played ball" otherwise. Ultimately, we closed 143 deals in 120 days on this project, a project made possible because of the acceptance of our option offer on the key $9.9MM ranch.

4. Made a business out of buying parcels for resale by making offers with $500 earnest money deposits, closing the ones we were able to resell, and walking from the others, happy as a clam with being able to tie up the parcels until our land buyers ("suede-shoe boys" ) picked the ones they wanted to buy (at a substantial profit to us for each one).

I learned not to be too efficient, though. I added one parcel I thought I had sealed up Friday night to my list of property for sale after tripling its price and adding it to my massive broadcast faxing (advanced for the time). The list with this parcel ended up on a broker's desk Saturday morning. Unfortunately, the sellers stopped into this broker's office on the way out of town, and were offered their own land at triple the price they had sold it to me for. They were not impressed, so I just cancelled the deal and got my option money back. 

5. Tied up a $120k lot, with $1000 option. I resold the lot in 3 months for $200k. Actually, I refused $200k, because I had it in my head that I wanted $100k for me, so asked $220k. My friend heard the phone call and told me I was the greediest so-and-so she had ever seen. I thought about it, agreed with her, and call the doc back to say that I would take the $200k. Luckily, he still wanted it, and we closed shortly thereafter at $200k.

Hoping to take the next step and create a massive new cash-flow with them, after being out of the game for a lot of years!



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The deals above illustrate some creative ways to use options to control real estate and turn a little money in to a LOT of money. You can learn more about OPTIONS at www.CashFlowDepot.com